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Arbitration & Commercial LawSupreme Court of India

M/s Surguja Bricks Industries Company vs State of Chhattisgarh & Ors.

Not available · 2025 INSC 1456Decided 18 Dec 2025
Not available
Justice Manoj Misra · Justice Ujjal Bhuyan

Background

The appellant company submitted a tender for a road construction contract floated by a Chhattisgarh government authority. It was disqualified at the technical evaluation stage on the ground that one of its experience certificates was worth less than 50% of the contract value, while its other qualifying experience came from a joint venture in which the appellant was only a partner. The appellant challenged the disqualification before the High Court of Chhattisgarh, which dismissed its writ petition and upheld the authority's decision.

Decision Breakdown

The Supreme Court examined whether the tendering authority had properly accounted for the appellant's proportionate share of experience earned through the joint venture. It held that disqualifying the appellant without considering its legitimate proportionate experience as a joint-venture partner rendered the decision-making process irrational and arbitrary, in breach of Article 14 of the Constitution (equal treatment/non-arbitrariness in state action). Since the High Court had failed to notice this irrationality, its judgment upholding the disqualification could not stand. The Court set aside both the disqualification decision and the High Court's order, and directed the authority to reconsider the appellant's tender by properly accounting for its joint-venture experience.

Lesson Learnt

When a government body evaluates tenders, it must rationally account for a bidder's proportionate experience earned through a joint venture rather than disregarding it outright: arbitrary tender disqualifications by public authorities can be struck down as violating the constitutional guarantee of fair, non-arbitrary state action.

M/s Surguja Bricks Industries Company vs State of Chhattisgarh & Ors. – Legal Case Shots | LegalAware