Case Note & Summary
The matter arose from a special leave petition filed before the Supreme Court against an order of the Division Bench of the High Court of Madhya Pradesh at Jabalpur dated August 14, 1996 in LPA No.138/96. The dispute concerned a tender condition for construction work that required prior satisfactory completion of specified runway or National highway works. The petitioners, a construction company, had filed writ petitions seeking a direction to the Airport Authority of India to issue tender forms, claiming they satisfied the tender condition. The learned single Judge dismissed the writ petitions, and the Division Bench affirmed the dismissal. Pursuant to an interim order, the petitioners submitted their tender forms, but at final hearing the writ petitions were dismissed. The petitioners contended that they had past experience in executing national highway works, with two contracts of more than the required amount, certificates from Executive Engineer and Superintending Engineer showing satisfactory performance, and completion of major part of the work within the scheduled time. They argued that failure to give tender forms violated their fundamental right to compete for the contract. The core legal issue was whether the High Court erred in interpreting the tender condition as requiring completed works rather than ongoing contracts with substantial progress. The Court examined Tender Condition No.2, which required satisfactory completion of at least two runway/National highway works each of value Rs.400 lakhs or one work of Rs.600 lakhs during the last five years, along with annual turnover of Rs.500 lakhs in each of the last three years and possession of computerized hot mix plant and concrete batching plant. The Court held that the word 'completed' unambiguously indicated that as on the date of application for tenders, the applicant must have completed the required works; it was a precondition. The petitioners admitted that they had not completed the works, though they claimed major part was completed. Therefore, the refusal to issue tender forms and the non-consideration of their tenders were not illegal. The Court distinguished the decision in New Horizons Ltd. v. Union of India, which dealt with refusal of tender forms at inception based on unproved previous experience, not a condition requiring completed works as a precondition. Accordingly, the special leave petitions were dismissed, and the High Court's view was upheld.
Headnote
A) Tender Law - Eligibility Criteria - Interpretation of 'Satisfactorily Completed' - Tender Condition No.2 - The condition required tenderers to have satisfactorily completed at least two runway/National highway works each of value Rs.400 lakhs or one work of Rs.600 lakhs during the last five years. The Court held that the word 'completed' means that as on the date of application for tenders, the applicant must have completed the required works. Ongoing contracts with only major part completed do not satisfy this precondition. Hence the refusal to issue tender forms was not illegal (Pages 1-2). B) Precedent - Applicability of New Horizons Ltd. v. Union of India - Distinguishing Previous Experience After Submission from Completion Precondition - The petitioners relied on New Horizons Ltd. [(1995) 1 SCC 478] to argue that previous experience should be considered after submission. The Court distinguished the case, holding that New Horizons concerned refusal of tender forms at inception based on unproved previous experience, not a condition requiring completed works as a precondition. Thus the precedent was not applicable (Page 2).
Issue of Consideration
Whether the High Court erred in holding that the petitioners did not meet Tender Condition No.2 requiring satisfactory completion of at least two runway/National highway works, when the petitioners had ongoing contracts with only major part completed; and whether the precedent in New Horizons Ltd. v. Union of India applies.
Final Decision
The special leave petitions were dismissed. The Supreme Court held that the tender condition required satisfactory completion of at least two runway/National highway works as on the date of application. Since petitioners admitted they had not completed the works, the refusal to give tender forms and non-consideration were not illegal.
Law Points
- The word 'completed' in tender condition means that as on the date of application for tenders
- the tenderer must have completed the required prior works
- ongoing contracts with major part completed do not satisfy the precondition. The decision in New Horizons Ltd. v. Union of India is distinguishable because it concerned previous experience after submission of tender
- not a condition requiring completion of works as a precondition.
