M/S SURGUJA BRICKS INDUSTRIES COMPANY v. STATE OF CHHATTISGARH
Tender Eligibility: Joint Venture Experience Must Be Considered Absent Explicit Exclusion; Ambiguous Tender Conditions Violate Article 14.
Court: Supreme Court of India
Citation: 2025 INSC 1456
Decision Date: 18-12-2025
List of Laws
Article 14 of the Constitution of India; Article 226 of the Constitution of India; Law of Tenders
- Facts: M/s. Surguja Bricks Industries Company (the appellant) submitted a tender for a road construction project. The appellant was disqualified at the technical evaluation stage because one experience certificate was for less than 50% of the contract value, and the other was from a joint venture where the appellant was a partner. The appellant's share of the joint venture work exceeded the 50% threshold. The tender notice (NIT) did not explicitly exclude joint venture experience.
- Procedural Posture: The appellant challenged the disqualification before the High Court of Chhattisgarh under Article 226 of the Constitution of India, which dismissed the writ petition. The appellant then filed a special leave petition before the Supreme Court of India.
- Issue: Was the rejection of the appellant's tender justified, considering the appellant's experience as a partner in a joint venture, when the tender notice did not explicitly exclude such experience? Specifically, does the term "each prime contractor" exclude consideration of joint venture experience?
- Holding: No, the rejection was not justified. The Supreme Court allowed the appeal, setting aside the High Court's judgment and the respondent's disqualification decision. The respondents were directed to reconsider the appellant's case, accepting its experience certificate as a member of the joint venture.
- Reasoning: The Court reasoned that the term "prime contractor" in the NIT, in the absence of a specific definition, should be interpreted in common parlance to mean the tenderer. The Court relied on New Horizons Limited Vs. Union of India, emphasizing that the experience of constituents of a joint venture should be considered. The Court also noted that a prior communication from the respondent clarified that joint venture experience would be counted. The Court held that eligibility criteria must be clear and unambiguous, and the absence of an explicit exclusion of joint venture experience meant it should have been considered. Disqualification based on an ambiguous interpretation of tender conditions violates Article 14 of the Constitution of India, leading to arbitrary exercise of power. The Court cited West Bengal State Electricity Board Vs. Patel Engineering to support the principle that tender conditions must be explicit to justify rejection.
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