You Can’t Invent Disqualifications After the Bid: Supreme Court Holds Joint Venture Experience Can’t Be Ignored in Tenders

“‘In Absence of Express Exclusion, Proportionate Joint Venture Experience Must Count’ ”, On 18 December 2025, the Supreme Court of India, in a reportable judgment, delivered a strong reaffirmation of fairness, legal certainty and equality in public procurement while deciding M/s. Surguja Bricks Industries Company v. State of Chhattisgarh & Others.

A Bench comprising Justice Ujjal Bhuyan and Justice Manoj Misra held that where tender conditions do not expressly prohibit consideration of joint venture experience, the proportionate experience of a joint venture partner cannot be excluded. Terming the rejection of the appellant’s technical bid as arbitrary and violative of Article 14, the Court set aside the judgment of the Chhattisgarh High Court and directed reconsideration of the appellant’s bid.

The ruling draws heavily from the landmark decision in New Horizons Ltd. v. Union of India and reinforces the doctrine that the State cannot reject a bid based on unstated or implied disqualifications.

“‘Prime Contractor’ Is Not a Magic Word to Exclude Joint Venture Experience”

The dispute arose from a Notice Inviting Tender dated 08 January 2025, issued by the Public Works Department, Chhattisgarh, for construction of a road project valued at over ₹4,500 crores. The eligibility clause required that “each prime contractor in the same name and style” must have completed similar works of specified value in the preceding five years.

The appellant, M/s. Surguja Bricks Industries Company, relied on an experience certificate issued in the name of a joint venture, where it held a 49% share, translating into proportionate experience exceeding the 50% threshold mandated under the NIT. However, the Technical Evaluation Committee rejected the bid on the ground that the experience was not in the appellant’s individual name.

Rejecting this approach, the Supreme Court noted that the expression “prime contractor” was nowhere defined in the NIT. Applying the common parlance test, the Court held that the prime contractor is the tenderer responsible for execution and that nothing in the tender barred reliance on proportionate joint venture experience.

The Bench observed that the respondents’ interpretation effectively read into the tender an exclusion “which does not exist in the document”, an approach the Constitution does not permit.

“‘Joint Venture Experience Is the Experience of Its Constituents’ — New Horizons Reaffirmed”

Relying on New Horizons Ltd. v. Union of India, the Court reiterated that in commercial transactions, the focus must be on the credentials and capacity of the persons behind the bidder, not merely the name in which the experience certificate is issued.

The Court recalled the principle laid down in New Horizons that:

“In respect of a joint venture, its experience can only mean the experience of the constituents of the joint venture.”

It held that failure to consider the proportionate experience of a joint venture partner renders the decision irrational, as it ignores commercial reality and defeats the very purpose of allowing joint ventures in infrastructure projects.

The judgment also relied on Ganpati PV–Talleres Alegria Track Pvt. Ltd. v. Union of India, where this Court had directed reconsideration of a bid after holding that joint venture experience could not be brushed aside mechanically.

“‘Eligibility Conditions Must Be Clear, Not a Trap’: Court on Legal Certainty in Tenders”

A key theme of the judgment is the requirement of clarity and certainty in tender conditions. The Supreme Court held that eligibility clauses must be “clear, unambiguous and explicit”, warning that vagueness opens the door to arbitrary exclusion.

Quoting West Bengal State Electricity Board v. Patel Engineering Co. Ltd., the Court emphasised that:

“To reject a tender for breach of a condition which is not explicit in the tender document is to give room to the State to act arbitrarily.”

The Bench reiterated the doctrine of “level playing field”, observing that bidders structure their participation based on the written terms of the NIT, and the State cannot later change the rules of the game.

“‘Deference Has Limits’: Judicial Review in Tender Matters Explained”

While reaffirming that courts ordinarily defer to the interpretation of tendering authorities, the Supreme Court made it clear that such deference is not absolute.

The Bench held that where the interpretation adopted by the authority is “irrational, absurd or produces arbitrary consequences”, constitutional courts are duty-bound to intervene. Otherwise, judicial review under Article 226 would become meaningless.

In the present case, the Court found that excluding proportionate joint venture experience without an express bar was manifestly unreasonable, especially when the tender itself did not prohibit such reliance.

Conclusion

Allowing the appeal, the Supreme Court set aside the Chhattisgarh High Court’s judgment dated 04 April 2025 and quashed the disqualification order dated 19 March 2025. The respondents were directed to reconsider the appellant’s bid by accepting its proportionate experience as a joint venture partner.

The ruling sends a clear message to tendering authorities across the country: eligibility conditions must be applied as written, not as imagined, and joint venture experience cannot be discarded unless the tender expressly says so.

In reaffirming fairness, transparency and commercial realism, the Court once again placed Article 14 at the heart of public procurement.

Date of Decision: 18 December 2025