Case Note & Summary
The writ petition sought to challenge the decision of the Executive Engineer, National Highway Division, Pune, rejecting the petitioner's bid as non-responsive in a tender for road maintenance work on NH-965D with an estimated cost of Rs.3,22,63,404. The petitioner, a limited liability partnership, had submitted its bid but was found deficient on several grounds as per the scrutiny sheet dated 23 September 2024. Those included failure to have annual turnover certified by a statutory auditor, non-submission of bid capacity in the prescribed format, missing documents for Plant Engineer and Quantity Surveyor, and crucially, failure to provide any legal document showing the relationship between the petitioner LLP and M/s. Nandkumar Constructions, a proprietary firm. The evaluation committee later, by communication dated 4 October 2024, confirmed the rejection primarily due to the absence of a notarized business transfer agreement. The petitioner argued that the rejection was arbitrary because the tender conditions did not originally mandate such a document; it was only upon clarification that a document was requested. It also contended that the experience and financial credentials of the proprietor of M/s. Nandkumar Constructions, who was also a partner in the petitioner LLP, should count towards the LLP's eligibility, relying on New Horizons Limited v. Union of India. The respondents, including the State and the successful bidder, argued that the tender conditions required strict adherence, that a partner and an LLP are separate legal entities under Section 23 of the LLP Act, and that the New Horizons case was distinguishable as it dealt with a consortium, not an LLP. The court after hearing both sides reserved judgment. The final decision is not recorded in the available text.
Headnote
A) Tender Law - Technical Bid Evaluation - Non-submission of Notarized Business Transfer Agreement - The tendering authority rejected the petitioner's bid because it failed to provide a notarized business transfer agreement to demonstrate its relationship with M/s. Nandkumar Constructions, which was required to stake a claim on that firm's experience and financial standing. The petitioner argued the rejection was arbitrary, but the respondents maintained that strict compliance was necessary and no valid business transfer document was submitted (Paras 3, 9-11). B) Limited Liability Partnership Act, 2008, Section 23 - Partner Distinct from LLP - Experience of Partner Cannot be Attributed to LLP - Under the LLP Act, a partner is a separate legal entity from the LLP; therefore, the experience and financial credentials of a partner or a proprietary firm cannot automatically be considered as that of the LLP unless proper documents like a business transfer agreement are executed and submitted as per tender conditions. The petitioner's reliance on New Horizons Limited was contested on this ground (Paras 5-7). C) Precedent - New Horizons Limited v. Union of India, (1995) 1 SCC 478 - Applicability to LLPs - The case held that experience of a constituent partner of a consortium could be considered, but respondents argued it is inapplicable to LLPs where the partner and the entity are legally distinct. The court examined the distinction between a consortium and an LLP (Paras 5-7).
Issue of Consideration
Whether the rejection of petitioner's technical bid for non-submission of a notarized business transfer agreement was arbitrary; whether the experience and financial credentials of a partner/proprietary firm can be considered as that of an LLP; whether the judgment in New Horizons Limited applies to LLPs
Final Decision
Decision not clearly stated
Law Points
- Legal points not extracted
- Experience of partner cannot be treated as experience of LLP
- Section 23 of Limited Liability Partnership Act
- 2008
- New Horizons Limited vs. Union of India not applicable to LLP
- strict compliance with tender conditions
- judicial review in tender matters limited
