Proportionate Joint Venture Experience Cannot Be Ignored in Tender Evaluation

The Hon’ble Supreme Court of India, in the case of M/s Surguja Bricks Industries Company v. State of Chhattisgarh & Ors., (2025 SCC OnLine SC 2916), decided on December 18, 2025, held that experience gained by a contractor as a partner in a joint venture must be considered on a proportionate basis while assessing eligibility in public tenders, unless the tender conditions expressly and unambiguously exclude such experience. The Court reiterated that ambiguous eligibility criteria cannot be interpreted to arbitrarily disqualify an otherwise eligible bidder.

The case arose from a Notice Inviting Tender (NIT) issued by the respondent, Chhattisgarh Public Works Department (PWD) for construction of a road project. M/s Surguja Bricks Industries Company, the appellant, submitted its bid along with experience certificates, one of which related to similar work executed through a joint venture in which the appellant held a 49% share. The Technical Evaluation Committee disqualified the appellant on the ground that experience gained as part of a joint venture could not be treated as experience of the bidder in its own name, and that the appellant’s individual work experience did not independently meet the prescribed threshold.

The appellant challenged the disqualification before the Chhattisgarh High Court, which declined interference, holding that interpretation of tender conditions lies primarily with the tendering authority and that no arbitrariness or mala fides were established. Aggrieved, the appellant approached the Hon’ble Supreme Court.

Allowing the appeal, the Supreme Court held that the eligibility condition requiring “each prime contractor in the same name and style” to satisfy the experience criteria did not expressly exclude experience gained as a member of a joint venture. In the absence of a clear and specific exclusion, rejection of proportionate joint venture experience was held to be irrational and violative of Article 14 of the Constitution of India, 1950. Relying on the case of New Horizons Ltd. v. Union of India, [(1995) 1 SCC 478], dated November 9, 1994, the Court reiterated that tender conditions must be interpreted from the standpoint of a prudent businessman and with due regard to commercial realities. Where a contractor has executed work as part of a joint venture, its experience necessarily forms part of the overall experience of the constituent partners and cannot be ignored mechanically.

The Court further emphasised that while courts ordinarily defer to the interpretation of tendering authorities, such deference is not absolute. Judicial intervention is warranted where the interpretation adopted is unreasonable, arbitrary, or leads to exclusion based on vague or ambiguous criteria. Eligibility conditions must be clear, unambiguous, and capable of uniform application to ensure transparency and a level playing field.

Accordingly, the Supreme Court set aside the disqualification order and the judgment of the High Court, and directed the authorities to reconsider the appellant’s bid by accepting its proportionate experience as a joint venture partner, reaffirming that public tender processes must adhere to principles of fairness, clarity, and non-arbitrariness.