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Judgment
(per Hon’ble The Acting Chief Justice Sri Manoj Kumar Tiwari)
Petitioner’s technical bid, submitted for the work of hill side cutting and muck disposal work (Phase II stage-I) and construction of wall and cross drainage work (Phase-II stage-2) in Kathgodam to Ranibag section of National Highway No. 87, was declared to be non-responsive for the following reason:-
“As per Sec. IV, Cl 1.1 (e) in case of JV, all partners of JV must fullfill a minimum of 25% of eligibility criteria for all requirements. As per sec. IV Cl 2.2 A(d) the bidder should have executed the minimum quantities of Principal item of work mentioned in bid, in any one of the 5 (five) Financial years. Both bidders of JV are not executing minimum quantities of Principal item of work mentioned in bid in any same Financial year.”
Thus feeling aggrieved, petitioner has approached this Court challenging order dated 23.05.2026 passed by Tender Evaluation Committee.
In para 2 of the writ petition, it is mentioned that petitioner participated in the tender process as a joint venture, lead partner being M/s Dinesh Chandra Patni with 65% shareholding and M/s Patni Engineering and Construction Limited, having 35% shareholding. As per case set up in the writ petition, estimated cost of the work is Rs. 546.83 Lacs and the work is to be completed within nine months.
Learned counsel for the petitioner submits that relevant clause of Standard Document for procurement of works/Government of Uttarakhand (SBD) does not require that all partners in the Joint Venture should have executed work to the extent of minimum 25% of the value of the work in question, in the same year to become eligible. He submits that there are two partners in the Joint Venture and both of them have completed required value of work in different years.
Reliance is placed upon Clause 1.1 e (i) of SBD, which is reproduced below:
“1. Eligible Bidder
1.1For determining the eligibility of Bidder, the following conditions are to be satisfied:
e. in the case of a joint venture
i.In case of JV, all partners of JV must fulfill a minimum of 25% of eligibility criteria for all requirements. All members shall be jointly and severally liable for the execution of the Contract in accordance with the Contract terms.”
Learned counsel for the petitioner has also drawn attention of this Court to Clause 2.2 A(d) of SBD, which is reproduced below:
“A. Qualification Criteria:
a)The Bidder should have achieved a minimum average annual Construction turnover (based on financial statement) over the last [5 (five)] financial years amounting to Rs. 322.62 lakh [usually not less than two times the estimated annual payments under this contract].
b)The Bidder should have Experience of ‘similar construction contracts’ in the role of contractor for at least the last [5 (Five)] years prior to the bid submission deadline.
c)The Bidder should have satisfactorily completed at least [one] similar work of [at least 33% of the contract value i.e. Rs. 212.93 lacs], as a prime contractor, within the last 60 Sixty months from the last date of submission. The similar work shall be strictly based on the nature, physical size, complexity, methods, technology or other characteristics for the works requirement described in Section V Form Tech 1
Note: Base year to be considered as the FY 2024-25 in which the tenders are invited. Financial turnover of previous years shall be given a weightage of 5% per year to bring them to the price level of the FY in which the tenders are invited.
d)The Bidder should have executed in any one of the 5 (five) financial years, the minimum quantities of the following works: [insert type and quantity of principal item of the works to be executed]
By referring to the aforesaid clauses of the SBD, it is contended on behalf of the petitioner that a joint venture entity is required to have achieved a minimum 25% of the above qualification in terms of Section IV Clause 1.1.
A counter affidavit is filed by Krishan Kumar, Executive Engineer, Temporary Division, PWD, Bhowali. Relevant paras of said counter affidavit are reproduced below:
“13.That the contents of paragraph no. 16 of the writ petition are denied. The rejection note specifically recorded that the Joint Venture partners were not found to satisfy the prescribed requirement relating to execution of minimum quantities of principal items of work in the manner contemplated under the bidding document. The petitioner is attempting to read the tender conditions selectively and contrary to their plain meaning. It is submitted that the petitioner has failed to establish that the documents furnished by the Joint Venture partners satisfy every component of the eligibility criteria as required under the bidding document. The qualifying experience of Each Partners of JV as a combined or individual must be demonstrable in one common financial year, because otherwise the JV is not showing the prescribed level of execution in any single year at all; it is merely stitching together experience from different years of different entities.
21.That the contents of paragraph nos. 34, 35, 36, 37 and 38 of the writ petition are denied. As per Sec. IV, Cl 1.1 (e) in case of JV, all partners of JV must fullfill a minimum of 25% of eligibility critera for all requirements. As per sec. IV Cl. 2.2 A.(d) the bidder should have executed the minimum quantities of Principal item of work mentioned in bid. in any one of the 5 (five) Financial years. Both bidders of JV are not executing minimum quantities of Principal item of work mentioned in bid in any same Financial year. The qualifying experience of Each Partners of JV as a combined or individual must be demonstrable in one common financial year, because otherwise the JV is not showing the prescribed level of execution in any single year at all; it is merely stitching together experience from different years of different entities. The Partner 01 namely M/S Patni Engineering and Construction has executed the minimum required quantities in work named "Chandak Bans Awalaghat motor Road km 29 to Tallisar Stage 1 Length 3.075 km" in FY 2020-21. The Partner 02 namely Dinesh Chandra Patni has executed the minimum required quantities in work named "T01-Dasaithal Khirmande Gwasikot Motor Road, Upgradation (Bituminous Concrete with waste plastic) Phase XXIII" in FY 2024-25. Both partners of JV are not executing minimum quantities of Principal item of work mentioned in any same Financial year. The true copies of the minimum required quantities of partner no. 1 and minimum required quantities of partner no. 2 are annexed as Annexure No. CA-3 & CA-4 respectively to this affidavit.
25.The contents of paragraph no. 43 of the writ petition are denied. The respondents state that the petitioner Joint Venture failed to satisfy the eligibility requirements in the manner prescribed under the applicable tender provisions. The conclusion reached by the Technical Evaluation Committee was based upon the records submitted by the petitioner itself and was neither arbitrary nor erroneous.
30.That the contents of paragraph no. 48 of the writ petition are denied. The respondents submit that the petitioner's interpretation of the eligibility conditions is erroneous. The mere assertion that each Joint Venture partner independently satisfied certain thresholds does not establish compliance with the tender requirements as interpreted by the competent authority. The eligibility criteria were required to be satisfied in the manner contemplated under the governing documents.
54.That the petitioner has applied in the bid process as Joint Venture Company comprising M/s Patni Engineering and Construction and M/s Dinesh Chandra Patni and the documents supplied by the petitioner shows that M/s Dinesh Chandra Patni was a leading partner in the JV, whereas the petitioner has not fulfilled the eligibility and qualification criteria as mentioned in SBD as per Clause 1(1.1)(e)(i) in case of JV, all partners of JV must fulfilled a minimum of 25% of eligibility criteria for all requirements. All Members shall be jointly and severally liable for the execution of the contract in accordance with contract terms. The petitioner company has also not fulfilled the Condition No. 2.2A of SBD as the petitioner was utterly failed to comply the relevant qualifying criteria, on these grounds they were declared non-responsive in the bid process.
Learned State Counsel refers to Clause 1.1 e (i) of Section IV of SBD for contending that in case of Joint Venture, all partners of Joint Venture must fulfill minimum 25% of eligibility criteria for all requirements. Learned State Counsel further submits that as per Clause 2.2 A(d), the minimum quantity of work which a bidder should have executed in any of the five preceding financial years has been given and, in the last column of the table, mentioned in Clause 1.1 (d), minimum quantity of work should be executed in any one of the 5 financial years is mentioned.
He further submits that a conjoint reading of Clause 1.1 e (i) with Clause 2.2 A(d) of SBD reveals that every partner in a Joint Venture must fulfill the minimum quantity of work, as indicated in the table in Clause 2.2 A(d) of the SBD.
The stand taken by petitioner is that even though two partners in the joint venture have independently completed minimum quantity of work mentioned in Clause 2.2 A(d) during the last 5 years, but he concedes that such work was completed by them not in the same financial year, but in different financial years.
We find some substance in the submission made by learned State Counsel.
Based on Clause 1.1 e (i), every partner of a Joint Venture has to separately meet the eligibility requirement, therefore the condition mentioned in Clause 2.2 A(d) of SBD has to be independently met by both the partners; since Clause 2.2 A(d) specifies the minimum quantity of work which has to be executed by the bidder in any one of the 5 financial years, therefore the insistence by the employer upon the condition of completing requisite quantity of work by each partner of the Joint Venture in the same financial year, cannot be said to be so arbitrary so as to warrant interference under Article 226 of the Constitution.
In the case of Central Coalfields Limited & another vs. SLL-SML (Joint Venture Consortium) & others, reported as (2016) 8 SCC 622 it was held that decision making process of the employer or owner of the project in accepting or rejecting the bid of a project tender should not be interfered with and interference is permissible only if the decision making process is mala fide or intended to favour someone. It was further held that the decision should not be interfered with unless it is so arbitrary or irrational that the court can say that the decision is one which no responsible authority acting reasonably and in accordance with relevant law could have reached.
In the case of Afcons Infrastructure Limited v. Nagpur Metro Rail Corporation Ltd., reported in (2016) 16 SCC 818, has held as under:-
“13.In other words, a mere disagreement with the decision-making process or the decision of the administrative authority is no reason for a constitutional court to interfere. The threshold of mala fides, intention to favour someone or arbitrariness, irrationality or perversity must be met before the constitutional court interferes with the decision-making process or the decision.”
In Afcons Infrastructure Limited (supra), it was further held that the owner or employer of a project, having authored the tender documents, is the best person to understand and appreciate its requirements and interpret its documents. Constitutional Courts must defer to his understanding and appreciation of the tender documents, unless there is mala fide or perversity in the understanding or appreciation or in the application of the terms of the tender conditions. It is possible that the owner or employer of a project may give an interpretation to the tender documents, which is not acceptable to the Constitutional Courts, but that by itself is not a reason for interfering with the interpretation given.
In Raunaq International Ltd vs I.V.R. Construction Ltd. And Ors reported as (1999) 1 SCC 492, Hon’ble Supreme Court held as under:-
“11.When a writ petition is filed in the High Court challenging the award of a contract by a public authority or the State, the court must be satisfied that there is some element of public interest involved in entertaining such a petition. If, for example, the dispute is purely between two tenderers, the court must be very careful to see if there is any element of public interest involved in the litigation. A mere difference in the prices offered by the two tenderers may or may not be decisive in deciding whether any public interest is involved in intervening in such a commercial transaction. It is important to bear in mind that by court intervention, the proposed project may be considerably delayed thus escalating the cost far more than any saving which the court would ultimately effect in public money by deciding the dispute in favour of one tenderer or the other tenderer. Therefore, unless the court is satisfied that there is a substantial amount of public interest, or the transaction is entered into mala fide, the court should not intervene under Article 226 in disputes between two rival tenderers.
12.…..
13.Hence before entertaining a writ petition and passing any interim orders in such petitions, the court must carefully weigh conflicting public interests. Only when it comes to a conclusion that there is an overwhelming public interest in entertaining the petition, the court should intervene.
14.Where there is an allegation of mala fides or an allegation that the contract has been entered into for collateral purposes and the court is satisfied on the material before it that the allegation needs further examination, the court would be entitled to entertain the petition. But even here, the court must weigh the consequences in balance before granting interim orders.
15.Where the decision-making process has been structured and the tender conditions set out the requirements, the court is entitled to examine whether these requirements have been considered. However, if any relaxation is granted for bona fide reasons, the tender conditions permit such relaxation and the decision is arrived at for legitimate reasons after a fair consideration of all offers, the court should hesitate to intervene.”
In the case of Air India Ltd. v. Cochin International Airport Ltd. and others, reported as (2000) 2 SCC 617, Hon’ble Supreme Court has held as under:-
“7.The law relating to award of a contract by the State, its corporations and bodies acting as instrumentalities and agencies of the Government has been settled by the decision of this Court in Ramana Dayaram Shetty v. International Airport Authority of India [(1979) 3 SCC 489] , Fertilizer Corpn. Kamgar Union (Regd.) v. Union of India [(1981) 1 SCC 568] , CCE v. Dunlop India Ltd. [(1985) 1 SCC 260 : 1985 SCC (Tax) 75] , Tata Cellular v. Union of India [(1994) 6 SCC 651] , Ramniklal N. Bhutta v. State of Maharashtra [(1997) 1 SCC 134] and Raunaq International Ltd. v. I.V.R. Construction Ltd. [(1999) 1 SCC 492] The award of a contract, whether it is by a private party or by a public body or the State, is essentially a commercial transaction. In arriving at a commercial decision considerations which are paramount are commercial considerations. The State can choose its own method to arrive at a decision. It can fix its own terms of invitation to tender and that is not open to judicial scrutiny. It can enter into negotiations before finally deciding to accept one of the offers made to it. Price need not always be the sole criterion for awarding a contract. It is free to grant any relaxation, for bona fide reasons, if the tender conditions permit such a relaxation. It may not accept the offer even though it happens to be the highest or the lowest. But the State, its corporations, instrumentalities and agencies are bound to adhere to the norms, standards and procedures laid down by them and cannot depart from them arbitrarily. Though that decision is not amenable to judicial review, the court can examine the decision-making process and interfere if it is found vitiated by mala fides, unreasonableness and arbitrariness. The State, its corporations, instrumentalities and agencies have the public duty to be fair to all concerned. Even when some defect is found in the decision-making process the court must exercise its discretionary power under Article 226 with great caution and should exercise it only in furtherance of public interest and not merely on the making out of a legal point. The court should always keep the larger public interest in mind in order to decide whether its intervention is called for or not. Only when it comes to a conclusion that overwhelming public interest requires interference, the court should intervene.”
Hon’ble Supreme Court in the case of M/s N.G. Projects Ltd. vs. Vinod Kumar Jain & others, reported as (2022) 6 SCC 127 has held that the constitutional Courts should refrain from interfering with tender process for infrastructure projects, as interference in such matters stalls projects of national importance and results in cost overrun. Paragraph nos. 21 to 23 of the said judgment are extracted below:-
“21.Since the construction of road is an infrastructure project and keeping in view the intent of the legislature that infrastructure projects should not be stayed, the High Court would have been well advised to hold its hand to stay the construction of the infrastructure project. Such provision should be kept in view even by the writ court while exercising its jurisdiction under Article 226 of the Constitution of India.
22.The satisfaction whether a bidder satisfies the tender condition is primarily upon the authority inviting the bids. Such authority is aware of expectations from the tenderers while evaluating the consequences of non-performance. In the tender in question, there were 15 bidders. Bids of 13 tenderers were found to be unresponsive i.e. not satisfying the tender conditions. The writ petitioner was one of them. It is not the case of the writ petitioner that action of the Technical Evaluation Committee was actuated by extraneous considerations or was mala fide. Therefore, on the same set of facts, different conclusions can be arrived at in a bona fide manner by the Technical Evaluation Committee. Since the view of the Technical Evaluation Committee was not to the liking of the writ petitioner, such decision does not warrant for interference in a grant of contract to a successful bidder.
23.In view of the above judgments of this Court, the writ court should refrain itself from imposing its decision over the decision of the employer as to whether or not to accept the bid of a tenderer. The Court does not have the expertise to examine the terms and conditions of the present day economic activities of the State and this limitation should be kept in view. Courts should be even more reluctant in interfering with contracts involving technical issues as there is a requirement of the necessary expertise to adjudicate upon such issues. The approach of the Court should be not to find fault with magnifying glass in its hands, rather the Court should examine as to whether the decision-making process is after complying with the procedure contemplated by the tender conditions. If the Court finds that there is total arbitrariness or that the tender has been granted in a mala fide manner, still the Court should refrain from interfering in the grant of tender but instead relegate the parties to seek damages for the wrongful exclusion rather than to injunct the execution of the contract. The injunction or interference in the tender leads to additional costs on the State and is also against public interest. Therefore, the State and its citizens suffer twice, firstly by paying escalation costs and secondly, by being deprived of the infrastructure for which the present day Governments are expected to work.”
Learned State Counsel points out that in recent times, due to influx of tourists to Nainital and Kainchi Dham, vehicular movement has increased manifold and because of the bottleneck created at Ranibagh due to landslide, huge problem of traffic jam is being faced everyday and people are stranded for several hours altogether. Thus, it is contended that the project in question, for which tender process was held, is not only necessary for easing the problem of traffic jam, but it is also a project of strategic importance.
As discussed above, petitioner is a Joint Venture and according to employer, both the partners are required to independently meet the condition of executing work of the value indicated in Clause 2.2 A(d) in any one of the financial years out of last five years; however, the partners in the Joint Venture do not meet the said condition, therefore this Court is not inclined to interfere with the interpretation to the tender conditions given by the employer.
Thus there is no scope for interference in the matter. The writ petition accordingly, fails and is dismissed.
Interim order, if any, stands vacated.