Bid By Two Legal Entities Held To Be Joint Venture | Interpretation Of Tender Terms Upheld | Bombay High Court Dismisses Challenge To Disqualification Under Clause 2.4
Isabella Mariam
In a recent judgement, the Division Bench of the Bombay High Court comprising Chief Justice Alok Aradhe and Justice M. S. Karnik dismissed a writ petition challenging a municipal tender disqualification. The court upheld the decision of the Bhiwandi Nizampur City Municipal Corporation (BNCMC) to disqualify the petitioners and affirm the award of a waste management contract to another bidder. The judgment, delivered on April 30, 2025, validated the Corporation’s interpretation of its tender clause barring joint ventures, observing that the decision-making process was not arbitrary or unreasonable.
The petition was filed by M/s. Barkat Contractors Pvt. Ltd. and M/s. Ratnaprabha Facility Services LLP, challenging their disqualification by the BNCMC in relation to a tender dated September 7, 2024. The tender pertained to door-to-door collection and transportation of municipal solid waste for Zone II of the Corporation for a period of three years. The petitioners submitted their bid on September 29, 2024, in the name of their alleged partnership firm, M/s. Barkat Contractors.
Upon examining the technical bids opened on October 1, 2024, the petitioners downloaded and reviewed submissions of rival bidders. They raised objections to the technical eligibility of Respondents 4 to 6, alleging that these bidders had submitted false, forged, or expired documents, and failed to meet 12 to 13 out of 16 mandatory qualifications.
Despite these objections, BNCMC's Technical Evaluation Committee disqualified the petitioners and declared Respondents 4 to 6 technically eligible. Subsequently, Respondent No. 4, M/s. Dimpal Enterprises, was declared the lowest bidder and awarded the contract on December 20, 2024.
The petitioners challenged:
- Technical disqualification order dated October 9, 2024,
- Financial eligibility declaration of Respondent No. 4 on October 13, 2024,
- Work order issued on December 20, 2024.
The petitioners contended their disqualification was based on an incorrect assumption that they formed a joint venture, which was prohibited under Clause 2.4 of the tender. They argued that their association was a lawful partnership firm between a private limited company and an LLP, which was permissible under the Indian Partnership Act, 1932. They submitted the partnership deed and Memorandum of Association belatedly before the court on January 8, 2025.
Further, the petitioners alleged that Respondent No. 4 had submitted forged ITRs for AY 2023-24 and 2024-25 with identical e-filing acknowledgments and barcodes, expired labour license, and a CA certificate without date or UDIN. Similar irregularities were alleged against Respondents 5 and 6.
In response, BNCMC stated that the petitioners failed to disclose or submit their partnership deed during the tender process and were disqualified for violating Clause 2.4, which explicitly barred joint ventures. The Corporation relied on the interpretation that the bid submitted jointly by a private limited company and LLP constituted a joint venture. It maintained that the decision was based on technical scrutiny by the Evaluation Committee and subsequent validation by the All-India Institute of Local Self Government (AIILSG).
The court recorded the following from the tender document: "2.4 No Joint Venture and subcontracting will be allowed."
Further, Clause 3 permitted bids only from individual entities such as companies, trusts, societies, proprietorships, partnership firms, or LLPs.
The Bench observed: "The interpretation of the Corporation that the Petitioner No.1 being a private limited company and Petitioner No.2 being LLP constitutes a joint venture cannot be regarded as perverse considering the tender document as a whole."
The court found the Corporation’s interpretation reasonable, stating: "The bid submitted jointly by the partnership firm and a private limited company has to be regarded as a joint venture... A partnership firm or LLP individually is permitted to bid but what is prohibited is a joint venture."
On the petitioners' failure to submit the partnership deed and Memorandum of Association during the bidding stage, the court stated: "While submitting the e-tender, the Petitioners did not disclose the said fact to the Corporation... Therefore, the Technical Evaluation Committee disqualified the Petitioners on the basis of the report submitted to the Corporation."
Regarding allegations against Respondent No. 4, the court referred to the due diligence process undertaken by the Corporation and the AIILSG: "We thus find that there is a scrutiny of the documents shared by the bidders by the All India Institute of Local Self Government."
The AIILSG initially flagged several deficiencies in Respondent No. 4’s documentation. However, after follow-up correspondence, submission of original documents, and chartered accountant validations, the bidder was found to have rectified all issues. The AIILSG eventually recommended Respondent No. 4 as "Qualified" and the petitioners as "Disqualified."
The court stated: "We are satisfied with the decision-making process adopted by the Corporation... Once we find that the procedure adopted is reasonably fair and transparent, it is not possible for us to extend the scope of judicial scrutiny merely because the Petitioners are not satisfied."
Relying on Supreme Court precedent in Raunaq International Ltd. vs. I.V.R. Construction Ltd. (1999) 1 SCC 492, the court concluded that no judicial relief could be granted to disqualified bidders.
On the reliance placed by the petitioners on the Bombay High Court judgement in Shah Investments, Financials, Developments & Consultants Pvt. Ltd. vs. State of Maharashtra, the court distinguished it, noting: "The facts in the present case are completely different."
The Division Bench concluded: "We therefore do not find any merit in this Writ Petition. The Writ Petition is dismissed."
Advocates Representing the Parties
For the Petitioners: Ms. Shilpi Jain instructed by Ms. Jaya Bagwe
For the Respondents: Mr. Dilip Bodake; Mr. Ravi Prakash Jadhav along with Ms. Richa Khatu
Case Title: M/s. Barkat Contractors Pvt. Ltd. & Anr. v. Bhiwandi Nizampur City Municipal Corporation & Ors.
Neutral Citation: 2025: BHC-AS:19682-DB
Case Number: Writ Petition No.17090 of 2024
Bench: Chief Justice Alok Aradhe and Justice M. S. Karnik
[Read/Download order]
