Summary
| Category | Data |
|---|---|
| Court | Supreme Court of India |
| Case Number | C.A. No.-014859-014859 – 2025 |
| Diary Number | 18309/2025 |
| Judge Name | HON’BLE MR. JUSTICE MANOJ MISRA |
| Bench | HON’BLE MR. JUSTICE MANOJ MISRA, HON’BLE MR. JUSTICE UJJAL BHUYAN |
| Precedent Value | Binding authority |
| Overrules / Affirms | Affirms New Horizons Limited v. Union of India (1995) |
| Type of Law | Administrative / Contract |
| Questions of Law | Whether a contractor’s share of joint-venture experience counts as the “prime contractor” experience under the NIT |
| Ratio Decidendi |
|
| Judgments Relied Upon |
|
| Logic / Jurisprudence / Authorities Relied Upon by the Court |
|
| Facts as Summarised by the Court |
|
Practical Impact
| Category | Impact |
|---|---|
| Binding On | All tender-inviting authorities and courts reviewing tender processes |
| Persuasive For | High Courts |
| Overrules | Impugned Division Bench decision of the Chhattisgarh High Court dated 04.04.2025 |
| Follows | New Horizons Limited v. Union of India (1995); Ganpati PV–Talleres Alegria Track Pvt. Ltd. v. Union of India (2009) |
What’s New / What Lawyers Should Note
- The SC reaffirms that, absent an explicit exclusion, a contractor’s proportionate share of joint-venture work must be counted toward prime-contractor experience.
- Tender documents must state eligibility criteria with legal certainty; vague or subjective terms open the door to arbitrary disqualification.
- Deference to the tendering authority’s interpretation yields where its construction is irrational or violates Article 14.
- The “prudent businessman” standard under New Horizons applies: courts must look behind names to the substance of experience credentials.
Summary of Legal Reasoning
- Qualification clause: Clause 1(b)(i)–(iii) of the NIT requires each prime contractor, in its own name and style, to have completed similar works ≥ 50% (or equivalent combinations).
- Undefined term: “Prime contractor” not defined in NIT; common-parlance test applies—entity submitting the bid must hold the experience in its name or through clear assignment.
- Precedent:
- New Horizons (1995): JV partners’ past experience must be credited to the JV if not explicitly excluded; applies commercial “prudent businessman” test.
- Ganpati (2009): followed New Horizons to allow reconsideration of bids where JV experience was ignored.
- Constitutional overlay: Article 14 bars arbitrary or perverse exclusions; tender norms must be clear and unambiguous (Patel Engineering; IRCTC; Reliance Energy).
- Application: No express bar on JV experience in the NIT; respondents’ implicit exclusion was arbitrary. SC set aside disqualification and HC order; directed re-evaluation accepting appellant’s 49% JV share.
Arguments by the Parties
Petitioner (Appellant)
- Clause 1(b)(i) does not bar JV experience; appellant’s 49% share (≈ Rs 2,404 lakhs) exceeds 50% threshold (Rs 2,261 lakhs).
- Pre-registration rules (unified system) allow proportional credit for JV partners.
- Established SC decisions (New Horizons; Ganpati) mandate crediting JV partner experience.
- Arbitrary and contradictory treatment by respondents violated Article 14.
Respondent (State / PWD)
- “Prime contractor” means contractor in its own name; JV partner experience not acceptable.
- JV is separate legal entity; experiences cannot be apportioned.
- Tendering authority’s interpretation is final absent mala fides or perversity (Afcons; Bharat Coking Coal).
- Appellant’s standalone work certificate (Rs 1,675.86 lakhs) did not meet 50% requirement.
Factual Background
In early 2025, the Chhattisgarh PWD issued a tender for a 27.20 km road requiring each prime contractor, in its own name, to have completed similar works worth ≥ 50% of a Rs 4,521.56 lakhs contract. The appellant bid online, attaching two experience certificates: one reflecting a joint-venture project (49% share ≈ Rs 2,404 lakhs) and another below threshold. The Technical Evaluation Committee disqualified the appellant for relying on JV experience and an insufficient standalone project. The Chhattisgarh High Court dismissed the appellant’s Article 226 petition. The Supreme Court granted SLP, found the exclusion arbitrary, and directed re-evaluation.
Statutory Analysis
- Clause 1(a) of the NIT: ≥ 60% financial turnover in any single year (last 5 years).
- Clause 1(b)(i)–(iii): experience requirements—(i) one similar work ≥ 50% value; or (ii) two works each ≥ 40%; or (iii) one work with ≥ 60% payments received.
- Article 14, Constitution of India: mandates non-arbitrariness and equal treatment in State action, including tender processes.
Alert Indicators
- ✔ Precedent Followed – New Horizons Limited v. Union of India (1995) and Ganpati PV – Talleres Alegria Track Pvt. Ltd. v. Union of India (2009)