Introduction
The Supreme Court has held that bidders cannot be disqualified for non-submission of a Joint Venture agreement when such submission is not expressly mandated by the tender terms. The Court held that tender conditions must be clear and unambiguous and that courts must not read additional requirements into contractual clauses.
Background
The Appellant, Maha Mineral Mining & Beneficiation Pvt. Ltd., had participated in a tender floated by the Respondent for beneficiation and logistics of coal for the Shree Singaji Thermal Power Project. The Appellant sought to rely on past experience executed through a previous consortium and submitted a work execution certificate from the Maharashtra State Mining Corporation, which recorded the Appellant’s 45 percent share in the JV, Hind Maha Mineral LLP, and specified the relevant JV agreement date as 2nd December 2019. However, the Tender Evaluation Committee rejected the Appellant’s bid, citing failure to submit the JV agreement to prove its shareholding under Clause 5(D) of the Notice Inviting Tender (NIT). The High Court upheld the disqualification and further held that even if the JV agreement had been submitted, the Appellant would have stood disqualified under Clause 5(B) for lack of spare washery capacity.
Aggrieved by the High Court’s findings and the manner in which new grounds of disqualification were introduced at the stage of final hearing, the Appellant approached the Supreme Court by way of Special Leave Petition.
Supreme Court’s Findings
The Supreme Court examined the disqualification of the Appellant under Clause 5(D) of the NIT and found that the rejection was not supported by the tender terms. It held that Clause 5(D) did not require mandatory submission of the Joint Venture agreement. The Appellant had submitted a work execution certificate issued by the Maharashtra State Mining Corporation, which clearly stated that the Appellant held a 45 percent share in the consortium and had completed similar work. The Court noted that the Tender Evaluation Committee failed to exercise its discretion under Clause 8.8 of the NIT, which permitted it to seek clarifications or additional documents, especially when there was no dispute about the authenticity of the certificate. It also rejected the argument that the Appellant had acted with mala fides or suppressed documents, as all versions of the JV agreement showed the same proportionate share and were consistent with the certificate. The Court further held that the High Court was not justified in introducing a fresh ground of disqualification under Clause 5(B) without giving the Appellant a proper opportunity to respond, especially when that ground had not been considered by the Tender Committee at all.
Conclusion
The Supreme Court held that the Appellant’s disqualification for failure to submit the JV agreement was arbitrary and contrary to the express terms of the NIT. It emphasised that tender conditions must be applied strictly and that bidders cannot be disqualified for not complying with a requirement that is not clearly stated. The Court set aside the findings of the High Court and the rejection under Clause 5(D). However, it remanded the question of disqualification under Clause 5(B) for fresh consideration by the High Court as that issue involved disputed facts and had not been adequately addressed in the earlier proceedings. The appeal was accordingly partly allowed1.
By - Chaitanyaa Bhandarkar