Supreme Court overturns disqualification in tender process, emphasizing review for arbitrariness.

The Supreme Court found the appellant's disqualification from a tender process to be illegal, arbitrary, and perverse. The Court overturned the High Court's decision, directing the tender process to continue with the appellant's bid reinstated for further consideration. The Court emphasized that administrative decisions should be reviewed for arbitrariness, unreasonableness, or bias, and found the respondent's disqualification decision lacking a reasonable basis.

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Issues Involved:
1. Eligibility Norms in Tender Conditions
2. Disqualification of the Appellant
3. Clarifications on Tender Queries
4. Legal Interpretation of "Single Entity" and "Government-Owned Entity"
5. Judicial Review of Administrative Decisions

Detailed Analysis:

1. Eligibility Norms in Tender Conditions:
The central issue revolves around the interpretation of eligibility criteria in the tender conditions for a prestigious project with global participation. The appellant was disqualified by the respondent based on their understanding of the qualifying criterion, which was upheld by the High Court.

2. Disqualification of the Appellant:
The appellant, a corporation formed by the merger of M/s. CSR Corporation Ltd. and M/s. CNR Corporation Ltd., was disqualified for not meeting the experience criteria as per clause 2.4 of the tender documents. The appellant argued that it should be allowed to use the experience of its subsidiaries to meet the qualification requirements. The respondent, however, maintained that the experience of subsidiary companies could not be counted unless they formed a joint venture or consortium with the parent company.

3. Clarifications on Tender Queries:
During pre-bid meetings, the respondent clarified that the experience of subsidiary companies would not be considered unless they formed a joint venture or consortium. The appellant contended that this clarification was in response to a different context and should not apply to its bid as a single entity.

4. Legal Interpretation of "Single Entity" and "Government-Owned Entity":
The Supreme Court examined whether the appellant, as a government-owned entity with 100% wholly owned subsidiaries, could be considered a single entity eligible to bid. The Court referred to a previous case, Consortium of Titagarh Firema Adler SPA, where it was held that a government-owned entity with its subsidiaries could be treated as a single entity for bidding purposes. The Court found that the appellant's structural integrity and functional unity with its subsidiaries should allow it to use their experience to meet the tender requirements.

5. Judicial Review of Administrative Decisions:
The Court emphasized that judicial review of administrative decisions should be limited to checking for arbitrariness, unreasonableness, or bias. The Court found that the respondent's decision to disqualify the appellant was arbitrary, discriminatory, and lacked a reasonable basis. The Court reiterated that technical evaluations should be left to experts unless there is clear evidence of mala fide or perversity.

Conclusion:
The Supreme Court concluded that the appellant's disqualification was unsustainable in law and on facts, being grossly illegal, arbitrary, and perverse. The Court set aside the High Court's judgment and directed that the tender process should proceed in accordance with the terms and conditions of the tender documents. The appeal was allowed, and the appellant's bid was reinstated for further consideration.

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