2005 (2) TMI 871 - HC - Indian Laws

Court emphasizes actual experience over fixed share in joint ventures. NHAI directed to honor experience certificates.

The court held that the interpretation of Clause 3.3.1 should focus on actual experience rather than a predetermined fixed share in joint ventures. NHAI ... - Issues Involved:1. Interpretation of eligibility criteria in Clause 3.3.1.2. Validity and effect of experience certificates issued to the petitioner by NHAI.Detailed Analysis:Issue 1: Interpretation of Eligibility Criteria in Clause 3.3.1The court examined the eligibility criteria stipulated in Clause 3.3.1, which required bidders to have worked on highway construction projects in the past seven years either as a prime contractor or a partner in a joint venture. The contentious part of the clause stated that in case of a joint venture, weightage towards experience would be given in proportion to their participation in the joint venture.The court held that the interpretation of this clause should be purposive, focusing on actual experience rather than a notional or constructive one. The expressions 'experience,' 'substantially completed,' 'successfully completed,' 'worked on,' and 'participated' imply performance, execution, or positive achievements. The court found that actual experience gathered by a bidder should be considered, and not a predetermined fixed share based on the original joint venture agreement. This interpretation aligns with the objective of the tendering process, which is to ensure the best available options and eliminate ineligible or potentially inefficient parties.Issue 2: Validity and Effect of Experience Certificates Issued by NHAIThe court analyzed the circumstances under which the experience certificates were issued to the petitioner by NHAI. The certificates, dated 19th March 2004 and 13th May 2004, reflected the petitioner's performance in the Surat contract. NHAI contended that these certificates could not conclusively determine the petitioner's eligibility and that the evaluation committee could independently assess the quantum of experience admissible to the petitioner.The court noted that the issuance of the certificates was based on a series of communications and recommendations within NHAI, acknowledging the petitioner's satisfactory performance. The certificates were never formally withdrawn, and no material was presented to show that they were unauthorized or incorrect. The court emphasized that NHAI's inconsistent positions regarding the certificates and its failure to formally withdraw them indicated arbitrariness. The court held that NHAI was bound by the principle of non-arbitrariness to honor its certificates, as they reflected the actual state of affairs regarding the petitioner's performance.Conclusion and Relief GrantedThe court concluded that NHAI's interpretation of Clause 3.3.1 was incorrect and that the petitioner was entitled to reckon actual experience gathered in the Surat contract. The court also held that NHAI could not ignore the experience certificates it had issued, as doing so would be arbitrary and unfair.For the Chittorgarh tender, the court dismissed the petition (WP 18680-81/2004) because the petitioner had claimed to be a joint venture partner with 25% experience, which did not meet the required criteria. However, for the East-West Corridor tender (WP 18730-31/2004), the court directed NHAI to process the petitioner's pre-eligibility application by considering the experience certificates and proceed further if the bid fulfilled other requirements.The writ petitions and all pending interlocutory applications were disposed of with no orders as to costs.