Bombay High Court
Nandkumar Infrastructure Llp Thr. Poa … vs The Superintendent Engineer National … on 24 June, 2025
2025:BHC-AS:24979-DB
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IN THE HIGH COURT OF JUDICATURE AT BOMBAY
CIVIL APPELLATE JURISDICTION
WRIT PETITION NO.13895 OF 2024
Nandkumar Infrastructure LLP
Through Power of Attorney Holder
Mr. Shamsunder Shajiram Chhabad
Age 44 years, Occ. Business,
Having Office at "Trishul Palace"
Plot No.30, Gulmohar Colony,
Opposite ITI Gendamal,
Satara 415 002. ....Petitioner
Versus
1 The Superintendent Engineer
National Highway Division, Pune
Having office at Central Building
3, BJ Medical Rd., Agarkar Nagar,
Pune 411 001
2 The Executive Engineer,
National Highway Division,
Pune, Having office at
Bandhkam Bhavan,
Opposite Hotel Sagar Plaza
Camp, Pune 411 001.
3 The State of Maharashtra
Through Public Works Department
Mantralaya, Mumbai.
4 Shri Pranil Dattatray Gharge,
Age Adult, Occ. Business,
Residing at Dew Drop 1-10,
Sonam Roasd, Saswad, Pune
5 Union of India
Through Ministry of
Road Transport & Highway
Dayakar Bhavan,
Maharshi Karve Road,
New Marine Line,
Churchgate, Mumbai - 20. ....Respondents
_________
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Mr. Yuvraj Narvankar i/b Mr. Suryajeet P. Chavan, for the Petitioner.
Ms. Neha S. Bhide, Government Pleader with Mr. O.A.
Chandurkar, Additional GP and Ms. G.R. Raghuwanshi, AGP for
Respondent Nos.1 to 3/State.
Mr. Tejas Deshmukh with Mr. H.D. Chavan, for Respondent No.4.
Mr. Dashrath A. Dubey, for Respondent No.5.
__________
CORAM: ALOK ARADHE, CJ. &
SANDEEP V. MARNE, J.
RESERVED ON : 16 JUNE 2025.
PRONOUNCED ON : 24 JUNE 2025.
J U D G M E N T (Per : Sandeep V. Marne, J.):
1. Rule. Rule is made returnable forthwith. With the consent of
the learned counsel appearing for the parties, the Petition is heard
finally.
2. Petitioner has filed the present Petition challenging the
decision of Respondent No.2 rejecting its bid thereby refusing to
consider its financial bid in the impugned tender process. The
Petitioner has also challenged the decision of Respondent Nos. 1
and 2 in declaring Respondent No.4 as the successful bidder.
3. Brief facts leading to filing of the Petition are that Respondent
Nos.1 and 2 issued Tender Notice dated 23 August 2024 for
execution of Road Maintenance Work on NH-965D at estimated cost
of Rs.3,22,63,404/-. Petitioner submitted its bid in pursuance of the
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Tender Notice. After completion of technical scrutiny of the bids,
Petitioner’s bid was rejected as ‘non-responsive’ on the ground that
it failed to submit notarized business transfer agreement.
Petitioner’s bid was rejected as non-responsive vide scrutiny sheet
dated 23 September 2024 by citing various reasons such as failure to
submit legal document showing relationship between the Petitioner
and M/s. Nandkumar Constructions, non-certification of annual
turnover by statutory auditor, non-submission of bid capacity in
prescribed format, non-attachment of document of Plant Engineer
and Quality Surveyor etc. Petitioner made representation dated
23 September 2024 and submitted the relevant documents.
It appears that the meeting of the Evaluation Committee was held
on 3 October 2024 and by communication dated 4 October 2024, the
Petitioner was informed that its bid was rejected as non-responsive
for failure to submit notarized Business Transfer Agreement.
Petitioner has challenged the rejection letter dated 4 October 2024 in
the present Petition. By its representation dated 4 October 2024,
Petitioner submitted a copy of the Memorandum of Understanding
for Business Transfer executed between the Petitioner and
M/s. Nandkumar Constructions. Since the decision for
disqualifying the Petitioner is not recalled, it has filed the present
Petition challenging the communication dated 4 October 2024 as
well as seeking disqualification of Respondent No.4. By order dated
10 October 2024, this Court directed that work order pursuant to the
subject tender, if issued, shall not be acted upon.
4. Mr. Narvankar, the learned counsel appearing for the
Petitioner would submit that rejection of Petitioner’s bid is clearly
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arbitrary and irrational. That the bid could not have been rejected
on the ground of non-submission of notarized copy of business
transfer agreement. That in accordance with the Government
Resolution dated 17 September 2019, Petitioner ought to have been
granted an opportunity to make good the shortfall. That in any case
the Petitioner did submit copy of the Memorandum of Business
Transfer vide letter dated 4 October 2024. That the document to
evidence business transfer was never requisitioned by the tendering
authority.
5. Mr. Narvankar would submit that the tendering authority has
apparently refused to take into consideration experience and
financial credentials of M/s. Nandkumar Constructions while
considering the Petitioner’s bid. That it is well settled position of
law that experience of the constituent partner of the firm can be
considered/counted as experience of the firm and in support, he
would rely upon judgment of the Apex Court in New Horizons
Limited and another vs. Union of India and others 1. That in any
case the sole proprietor of M/s. Nandkumar Constructions viz. Mr.
Sahajiram Chhabad is otherwise the partner of Petitioner-
Nandkumar Construction LLP. That proprietary firm-M/s.
Nandkumar Construction has merged with the Petitioner. He
would therefore submit that the decision of the Respondent Nos.1
and 2, being arbitrary, is liable to be set aside.
6. The Petition is opposed by Mr. Chandurkar, the learned
Additional Government Pleader appearing for Respondent Nos.1
1 (1995) 1 SCC 478
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and 2-State. He would submit that the Petitioner has failed to meet
the eligibility criteria prescribed in the tender document. In absence
of a valid business transfer agreement, the Tendering Authority was
unable to consider the experience or financial credentials of
M/s. Nandkumar Constructions to be that of the Petitioner. That
Petitioner has raised misleading claim about merger of
M/s. Nandkumar Constructions with the Petitioner-LLP and that
therefore it has incurred disqualification under the tender clauses.
He would submit that judgment of the Apex Court in
New Horizons Limited (supra) has no application to an LLP. That
experience of a partner in LLP cannot be considered as experience
of an LLP and in support, he would rely upon the Division Bench
judgment of Punjab and Haryana High Court in A.G. Construction
Co. vs. Food Corporation of India and others 2. He would pray for
dismissal of the Petition.
7. The Petition is also opposed by Mr. Tejas Deshmukh, the
learned counsel appearing for Respondent No.4. He would rely
upon provisions of Section 23 of the Limited Liability Partnership
Act, 2008 (the Act) in support of his contention that the partner of
an LLP is a distinct person/entity than that of the LLP. He would
question the authenticity of the alleged Business Transfer
Agreement, which is shown to have been executed on
29 February 2024 but is dated 18 May 2024. That M/s. Nandkumar
Constructions cannot be treated to have merged with the Petitioner-
LLP as a work order has been issued in the name of
M/s. Nandkumar Constructions on 21 August 2024 after execution
2 2021 SCC OnLine P&H 306
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of the alleged Agreement of Merger dated 18 May 2024. That the
Petitioner has thus relied upon forged documents and is not
entitled to discretionary relief from this Court under Article 226 of
the Constitution of India. That Petitioner is a body corporate
registered under the Limited Liability Partnership Act, 2008 and
therefore experience or financial credential of M/s. Nandkumar
Construction cannot be treated as that of Petitioner LLP. That a
merger or change in shareholding pattern of LLP requires certain
procedure to be followed under Section 60 of the Act and there is
nothing on record to indicate that such procedure has been
followed. That therefore no cognizance can be taken in respect of
the so called Agreement of Business Transfer relied upon by the
Petitioner. He would accordingly pray for dismissal of the Petition.
8. We have considered the submissions and have perused the
records of the case.
9. Petitioner’s bid has been rejected by Respondent Nos.1 and 2
vide communication dated 4 October 2024 citing the reason of non-
submission of notarized business transfer agreement. Before
issuance of the rejection letter dated 4 October 2024, a scrutiny sheet
was published declaring the result of evaluation, under which the
bid of the Petitioner was declared non-responsive for the following
reasons :-
Sr. No. Name of Contractors Result of Evaluation
4 M/s. Nandkumar *Annual turnover not certified by statutory
Infrastructures LLP auditor, but certified by chartered
Accountant.
*Bid capacity is not submitted in prescribed
format as in RFP document.
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*Plant Engineer and Quanity Surveyor
document not attached.
*Drum Type Hot Mix Plant with Electronic
Controls of (Minimum 60-90 TPH capacity)
not submitted.
*Bidder NANDKUMAR INFRA-
STRUCTURES LLP fails to provide any legal
document stating relation with Nandkumar
Constructions.
10. Petitioner submitted representation dated 23 September 2024
seeking declaration of its qualification by submitting various
documents. The Respondent Nos.1 and 2 thereafter issued
communication dated 25 September 2024 by making following
remarks against documents and response submitted by the
Petitioner :-
Name of the Uploaded Compliance Clarification
Contractor Result of
Evaluation
M/s. Non- Responsive and qualified
Nandkumar Responsive
Infra- 1. As per Tender Condition 4.5.3
structures 1. Annual General Experience The
LLP
certified applicant shall meet the
turnover by following minimum criteria
not statutory
auditor, but (a) Average annual financial 1)a) As per ITB-4, 3-(f),
certified by turnover (defined as billing for reports on financial
chartered works in progress and completed standing of the Bidder
Accountant. in all classes of civil engineering such as profit and loss
construction works only) over the statements and
last five years of 40% of the value auditor’s report for
2. Bid of contract/contract applied for. the past five years,
capacity is This should be duly audited by duly certified by
not Chartered Accountant. Year in statutory auditor. It is
submitted in which no turnover is shown hereby requested to
prescribed would also be considered for clarify that S.K.
format as in working out the average turnover. Soman, chartered
RPF Which is uploaded in Envelop Accountant, who
Document no.1 Hence your Point no.1 is audited the balance
Invalid. sheet. P & L statement
etc. is a statutory
auditor.
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2. Bid Capacity is submitted as 2) The bidder
per Tender Condition no.4.5.9 Bid submitted the bid
3. Plant Capacity Applicant who meets capacity certificate
Engineer and the minimum qualification only for PWD works.
quanity criteria will be qualified only if Value of B is not
surveyor their available bid capacity is clearly mentioned.
attached more than the total bid value. The You are hereby
document available bid capacity will be requested to submit
not calculated as under: the bid capacity
certificate with
1. Assessed Available Bid updated value of B.
capacity = Document regarding
(AxNx2-B), value of B should be
submitted.
Hence your Point no.2 is Invalid.
3. Details of Plant Engineer and 3. The bidder is
4. Drum Quantity Surveyor are uploaded hereby requested to
Type hot Mix in Tender as per Tender submit document
plant with Condition 4.5.4 Personal regarding Details of
electronic capabilities The Applicant must Plant Engineer and
controls have suitably qualified personal Quantity surveyor.
(Minimum to fill the following positions. The
60-90 TPH Applicant will supply
capacity) not information on a prime candidate
submitted and alternate for each position,
both of whom should meet the
experience requirements below.
specified.
There’s no specific condition in
tender to upload Documents for
the same. Hence your Point no.3
is Invalid.
4 Batch Type Hot Mix Plant of 4. Accepted
Atlas ABP 120 TPH with recycling
Unit is available for this work.
Purchase Deed along with
M.O.S.T. Certificate and all other
supporting documents are
attached in Tender File no.6 Page
no.73 to 82 and M.O.S.T.
Certificate at Page no.96. Hence
your point no.4 is Invalid.
Besides M/s. Nandkumar Infrastructure LLP fails to provide any legal
document regarding merger or relation with Nandkumar Constructions.
Hence, bidder is requested to submit a clarification or concerned document
regarding this.
The bidder is requested to submit all the concerned document to this
office upto 5:30 Pm dated 26/09/2024.”
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11. Thus, as per the communication dated 25 September 2024, the
Petitioner was directed to submit a legal document evidencing
merger or relation with M/s. Nandkumar Constructions. The
document was apparently sought for the purpose of meeting the
criteria relating to general experience stipulated under Clause 4.5.3
and financial position prescribed under Clause 4.5.6. The Petitioner
submitted a response dated 26 September 2024 stating as under :-
“With reference to above subject, we hereby submit all the documents
requested/required by you. Details of the same are attached with this
letter.
Regarding Merger or relation of Nandkumar Infrastructures LLP with
Nandkumar Construction we have already submitted documents in
Tender Envelop no.I File no.5 Page no.1 to 10 copies of same is attached
for your ready reference.
Further, we request you to kindly review the submitted documents and
ask for any additional documents or clarifications if required. We kindly
request you to qualify and open our Bid Envelope No.2 in the interest of
fair and honest competition and for the sake of Government/Public
interest. ”
12. The Petitioner was communicated decision of rejection of its
bid vide letter dated 4 October 2024 which reads thus :-
“For the above subject work tender, this office has completed
the Technical Scrutiny of Bidder’s document.
Accordingly, the documents submitted by you vide reference
no.1, regarding legal document for relation/merger of
“Nandkumar construction” with “Nandkumar
Infrastructure LLP” is not considered by the committee.
Hence, On ground of not submitting Notorized Business transfer
agreement, it can’t be considered for qualifying of tender. Hence
“Non-Responsive”.
13. Along with its Affidavit-in-Reply, Respondent Nos.1 and 2
have produced the detailed scrutiny sheet dated 4 October 2024,
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which elucidates the exact reasons for rejection of Petitioner’s bid as
under :-
Sr. No. Name of Contractors Result of Evaluation
4 M/s. Nandkumar *The bidder ‘Nandkumar Construction LLP’
Infrastructures LLP is established in April 2024 and the bidder
has given an undertaking on Rs.100 Stamp
paper regarding transfer of experience from
proprietary firm ‘Nandkumar Construction’
to the bidder. It is important to note that in
such cases, ‘Business Transfer Agreement’ is
mandatory which gives details of the
experience, assets, liabilities etc. transferred
along with the latest balance sheet of the
transferee.
In the current case, as the bidder has not
provided the notarized Business Transfer
Agreement, the experience of the previous
firm may not be considered.
14. After its bid was rejected on 4 October 2024 for failure to
submit notarized business transfer agreement, the Petitioner
submitted copy of Memorandum of Understanding for Business
Transfer alongwith its letter dated 4 October 2024.
15. The issue for consideration in the present case is whether
Petitioner-LLP can be permitted to rely upon documents of
eligibility of its partner who is the proprietor of M/s. Nandkumar
Constructions for establishing its own eligibility.
16. The Petitioner has relied upon judgment of the Apex Court in
New Horizons Limited (supra) in which it is held in paragraph 23
as under :-
23. Even if it be assumed that the requirement regarding experience as
set out in the advertisement dated 22-4-1993 inviting tenders is a
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find no basis for the same, the said requirement regarding experience
cannot be construed to mean that the said experience should be of the
tenderer in his name only. It is possible to visualise a situation where a
person having past experience has entered into a partnership and the
tender has been submitted in the name of the partnership firm which
may not have any past experience in its own name. That does not mean
that the earlier experience of one of the partners of the firm cannot be
taken into consideration. Similarly, a company incorporated under the
Companies Act having past experience may undergo reorganisation as a
result of merger or amalgamation with another company which may
have no such past experience and the tender is submitted in the name of
the reorganised company. It could not be the purport of the requirement
about experience that the experience of the company which has merged
into the reorganised company cannot be taken into consideration
because the tender has not been submitted in its name and has been
submitted in the name of the reorganised company which does not have
experience in its name. Conversely there may be a split in a company
and persons looking after a particular field of the business of the
company form a new company after leaving it. The new company,
though having persons with experience in the field, has no experience in
its name while the original company having experience in its name lacks
persons with experience. The requirement regarding experience does
not mean that the offer of the original company must be considered
because it has experience in its name though it does not have
experienced persons with it and ignore the offer of the new company
because it does not have experience in its name though it has persons
having experience in the field. While considering the requirement
regarding experience it has to be borne in mind that the said
requirement is contained in a document inviting offers for a commercial
transaction. The terms and conditions of such a document have to be
construed from the standpoint of a prudent businessman. When a
businessman enters into a contract whereunder some work is to be
performed he seeks to assure himself about the credentials of the person
who is to be entrusted with the performance of the work. Such
credentials are to be examined from a commercial point of view which
means that if the contract is to be entered with a company he will look
into the background of the company and the persons who are in control
of the same and their capacity to execute the work. He would go not by
the name of the company but by the persons behind the company. ……
(underlining added)
17. The Division Bench of this Court has also decided the issue of
consideration of experience of partner as the experience of
partnership firm in Sagar Lookouts vs. Maharashtra Housing and
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Area Development Authority and others 3. After referring to various
judgments of the Apex Court including the judgment in New
Horizons Limited (supra), Maa Nabadurga Construction vs. Saroj
Kumar Jena4 and of Division Bench of this Court in IMS Bhatia
Transport Contractor vs. Union of India 5, this Court has held in
paragraphs 31, 33, 34 and 35 as under :-
31. A coordinate Bench of this Court in IMS Bhatia Transport
Contractor (supra) followed the decisions of the Apex Court in New
Horizons Limited (supra) and Maa Nabadurga Construction (supra) and in
paragraph 19 observed thus:
“19. It has been held by the Apex Court in the aforesaid case that
the person having past experience enters into the partnership and
the tender is submitted in the name of partnership firm which
may not have any past experience in its own name. That does not
mean that the earlier experience of one of the partners of the firm
cannot be taken into consideration.
Experience is intangible. It cannot be computed in monetary
terms. The experience is not a property as contemplated under
section 14 of the Partnership Act.”
33. In these facts, let us test if the approach of the Committee in
discarding these documents, in view of its understanding that the
experience of the firm itself is relevant for consideration and not that of
its partner, is justified. What happens in a situation where the firm has
the requisite experience but the partners fall short of the experience?
Will such firm be held eligible? There may be a situation where the firm
may not have the experience but the partners who are to execute the
work are experienced. The term ‘bidder’ is not defined in the RFP.
34. …… It is a settled law that a partnership has been held to be a
compendious name for its partners and that the experience is a human
attribute which does not form part of the property or the assets of the
firm in the usual sense. It is the experience of the persons executing the
work that will have to be considered. This is our understanding of what
Their Lordships observed in New Horizons Limited (supra).
35. Looking at the issue from another angle, will a prudent businessman
like MHADB hand over a tender in favour of a firm of which partners
do not have the requisite experience stipulated? As a prudent
businessman, it is of course best left to MHADB to look after its business
3 2022 SCC OnLine Bom 1483
4 2015 SCC OnLine SC 1933
5 2021(4) Mh.L.J. 233
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interest and the scope of interference in such decisions is extremely
limited. But to allow MHADB to construe the term ‘Bidder’ in a literal
manner, that it is the firm’s experience itself will qualify, is something
which does not commend to us. It is here that the observations of His
Lordship Mathew J. in V. Punnan Thomas (supra) which we have quoted
in paragraph 19 of this judgment assume significance. There is no
provision in the RFP that the Bidder is given a restricted meaning to
mean the firm itself and not the person in charge of it. The Bidder has to
be understood to mean the person in charge of the firm, though the bid
is by or on behalf of the firm. The notice inviting tender does not
preclude adoption of this course of action. If the contention of MHADB
is to be accepted, then once a bid is by a firm having experience,
irrespective of whether the person in charge is experienced or not, the
firm’s bid will have to be held eligible for consideration.
18. The Division Bench of Gauhati High Court has also held that
experience of a partner can be treated as experience of the
partnership firm in Trio Stony Mart vs. Jamal Ahmed and others 6,
the Division Bench has held in paragraph 25 to 29 as under :-
25. It is a settled proposition that a partnership firm is not a
juristic person. It is an association of persons where individual
identity of the individual partners is recognized. This means that
a partnership firm is a collection of the partners and nothing else.
It is not a legal entity and has no separate legal existence. It is a
mere collective name for the individuals who are the members of
the partnership. That apart, requirement of the clause is not that
financial soundness certificate has to be of the tendering firm if it
is a partnership firm. All that it says is that a financial soundness
certificate from the concerned Deputy Commissioner or Sub-
Divisional Officer ascertaining the financial capability to operate
the mining lease/contract should accompany the tender papers.
26. In New Horizons Ltd. v. Union of India, (1995) 1 SCC 478,
Supreme Court was considering evaluation of one of the
eligibility criteria for the tenderers, namely, ‘experience’ by the
Tender Evaluation Committee. The tenderer in that case was a
joint venture company. In the context of that case, Supreme Court
held that the requirement regarding ‘experience’ cannot be
construed to mean that such ‘experience’ should be of the
tenderer in his name only. It was possible to visualize a situation
where a person having past experience had entered into a
partnership and the tender had been submitted in the name of
6 (2018) 3 Gauhati Law Reporter 92,
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the partnership firm, which may not have any past experience in
its own name. This would not mean that the earlier experience of
one of the partners of the firm could not be taken into
consideration. Similarly, a company incorporated under the
Companies Act, 1956 having past experience may undergo
reorganisation as a result of merger or amalgamation with
another company which may have no such past experience and
the tender is submitted in the name of the re-organised company.
It cannot be the purport of the requirement that the ‘experience’
of the company which had merged into the re-organized
company cannot be taken into consideration because tender has
not been submitted in its name and has been submitted in the
name of the reorganized company which does not have
‘experience’ in its name. Conversely, there may be a split in the
company and the persons looking after a particular field of the
business of the company form a new company after leaving it.
The new company though having persons with ‘experience’ in the
field has no experience in its name while the original company
having ‘experience’ in its name lacks persons with experience.
The requirement regarding ‘experience’ does not mean that the
offer of the original company must be considered because it has
‘experience’ in its name though it does not have experienced
persons with it and ignore the offer of the new company because
it does not have ‘experience’ in its name though it has persons
having ‘experience’ in the field. Supreme Court held that while
considering the requirement regarding ‘experience’, it has to be
borne in mind that the said requirement is contained in a
document inviting offers for a commercial transaction. Terms and
conditions of such a document have to be construed from the
standpoint of a prudent businessman. Thereafter, Supreme Court
went on to explain the evolving concept of joint venture.
27. The reasonings given by the Supreme Court in respect of the
eligibility requirement of ‘experience’, in our considered opinion,
would also be applicable in the case of a financial soundness
certificate as required under clause 12(d) of the sale notice.
28. In Master Marine Services (P.) Ltd. v. Metcalfe & Hodgkinson (P.)
Ltd., (2005) 6 SCC 138, Supreme Court in the context of the tender
conditions requiring the bidder to have licence to act as
Surveyor/Loss Assessor under the Insurance Act to prequalify,
held that tender document did not say that in a case where a
company had made a bid, the licence to act as Surveyor/Loss
Assessor under the Insurance Act must be in the name of the
company itself or that a licence personally in the name of the
Chairman or a Director of the company would not be treated as a
valid compliance with the requirement of the tender.
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29. In the instant case, requirement of clause 12(d) is that tender
papers must be accompanied by a financial soundness certificate
ascertaining the financial capability to operate the mining
lease/contract which is to be obtained from the concerned
Deputy Commissioner/Sub-Divisional Officer. It nowhere says
that the financial soundness certificate has to be that of a
partnership firm if the tenderer is a partnership firm. We have
already noted that a partnership firm is not a juristic entity and is
only an association of persons. It is a collective name of the
individual partners comprising the partnership. A partnership
firm being not a legal person, the ultimate liability would be that
of the partners. Every partner is liable for all acts of the
partnership firm, jointly as well as severally. Therefore, having
regard to the settled legal position, a financial soundness
certificate of any one of the partners comprising the partnership,
to our mind, would fulfill the requirement of the aforesaid
condition. Whether the particular tenderer is financially sound or
not, the decision is that of the tendering authority or may be, that
of the higher authorities, including the Appellate Authority
under the Assam Minor Mineral Concession Rules, 2013.
Ordinarily, Court should not substitute its understanding of
financial soundness for that of the administrative authorities. Of
course, in a case of arbitrariness or unreasonableness or mala fide
exercise of power, certainly court would interfere with such
decision but in the facts and circumstances of the case,
interpretation given by the learned Single Judge to the
requirement of clause 12(d) of the sale notice would not be
justified.
19. On the other hand, Mr. Chandurkar has relied upon judgment
of Division Bench of the Punjab and Haryana High Court in
A.G. Construction Co. (supra). The case before the Punjab and
Haryana High Court involved a reverse situation where a
proprietary concern M/s. A.G. Construction Co. had submitted bid
in pursuance of the Tender Notice and it was the contention of the
Petitioner-Proprietor that the experience earned by him while being
a partner of the Partnership Firm-M/s. B.G. Constructions Co.
Bathinda be reckoned as his own experience. It is in the light of the
above peculiar facts that the Division Bench of Punjab and Haryana
High Court distinguished the judgment of the Apex Court in
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New Horizons Limited (supra) by holding that in each of the
illustrations described by the Apex Court an individual or entity
possessed the requisite tangible experience in its individual
capacity which was quantifiable and with which it could merge
itself in another company or enter into partnership with a firm
which lacked the necessary experience. The Division Bench held in
paragraph 25 as under :-
“25. In fact, upon an analysis of the decision in New Horizons Limited
(supra), we are rather of the opinion that our view finds resonance and
support in few of the observations emphasized by us, while extracting
relevant paragraphs of the judgment. For instance, in each of the
illustrations described by the Supreme Court, an individual or an entity
possessed the requisite tangible experience in its individual capacity,
which was quantifiable (qualitatively and/or quantitatively), and with
which it could merge itself in another company or enter into a
partnership with a firm which lacked the necessary experience. Since
the fact that such individual or entity actually had the experience was
incontrovertible in these illustrations, the Supreme Court remarked on
how absurd it was to discount such experience just because the re
organized company or the firm which had submitted the bid did not
have that experience in its name.”
20. In the peculiar factual matrix of the case in A.G. Construction
Co. (supra) the Division Bench of Punjab and Haryana High Court
held that experience in the name of erstwhile partnership firm in
which the Petitioner was a partner could not be considered as an
experience earned by him in its individual capacity. The judgment
is thus clearly distinguishable and cannot be a reason for taking a
different view than the one enunciated by the Apex Court in
New Horizons Limited and another (supra) as followed by Division
Bench of this Court in Sagar Lookouts (supra).
21. In our view therefore the experience of Proprietor of
M/s. Nandkumar Constructions is required to be taken into
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consideration as experience of the Petitioner-LLP for the purpose of
evaluation of Petitioner’s technical eligibility.
22. Mr. Deshmukh has strenuously relied upon Section 23 of the
Act in support of his contention that LLP stands on completely
different footing than that of partnership firm and that therefore the
law enunciated by the Apex Court in New Horizons Limited (supra)
would have no application in relation to the LLP. Section 23 of the
Act provides thus:-
“23. Relationship of partners.-
(1) Save as otherwise provided by this Act, the mutual rights and duties
of the partners of a limited liability partnership, and the mutual rights
and duties of a limited liability partnership and its partners, shall be
governed by the limited liability partnership agreement between the
partners, or between the limited liability partnership and its partners.
(2) The limited liability partnership agreement and any changes, if any,
made therein shall be filed with the Registrar in such form, manner and
accompanied by such fees as may be prescribed.
(3) An agreement in writing made before the incorporation of a limited
liability partnership between the persons who subscribe their names to
the incorporation document may impose obligations on the limited
liability partnership, provided such agreement is ratified by all the
partners after the incorporation of the limited liability partnership.
(4) In the absence of agreement as to any matter, the mutual rights and
duties of the partners and the mutual rights and duties of the limited
liability partnership and the partners shall be determined by the
provisions relating to that matter as are set out in the First Schedule”.
23. In our view, what Section 23 of the Act provides for is
governing of rights and duties of partners and rights and duties of
LLP by the agreement. In our view, provisions of Section 23 of the
Act would not make inapplicable to a LLP, the principle of
reckoning an experience of partner prior to his entry into
partnership firm as experience of the firm. Both Respondent Nos.1
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to 3 as well as Respondent No.4 have raised doubts about
authenticity of Memorandum of Understanding for business
transfer relied upon by the Petitioner. In our view, once the
principle of reckoning of experience a proprietor after his entry into
LLP as experience of LLP is recognized, whether there is actual
merger of the business or not becomes irrelevant. In that sense, it
was not really necessary for the Petitioner to prove merger of
business of the proprietary concern into the LLP. Nonetheless
Petitioner has produced document evidencing such merger.
Mr. Deshmukh has relied upon provisions of Section 60 of the Act
in support of his contention that the said provision envisages
following of a detailed procedure for a scheme of arrangement or
merger of LLP. In our view, the argument has no basis as Section 60
of the Act deals with compromise or arrangement of LLP with its
creditors or partners. Here we are not concerned with any
arrangement between the existing partners of the LLP. The
proprietor of M/s. Nandkumar Constructions has become partner
of LLP by its very formation and therefore Section 60 of the Act
would not have any application in relation to formation of the LLP.
In any event, Section 60 of the Act is wholly irrelevant for applying
the principle of reckoning experience of M/s. Nandkumar
Constructions as the experience of the LLP.
24. After considering the overall conspectus of the case, we are of
the view that the tendering authority has grossly erred in holding
Petitioner’s bid as non-responsive. Petitioner has qualified the
prescribed eligibility criteria and accordingly his financial bid is
required to be considered.
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25. Mr. Narvankar had submitted that Petitioner is L-I and
deserves to be awarded the contract. As of now, the tendering
authority is not aware about the exact price quoted by the Petitioner
since its financial bid was never opened. Respondent No.4 has been
adjudged successful bidder. Mr. Deshmukh, after taking
instructions from his client, has made a fair statement that in the
event financial bid of the Petitioner being found L-I, Respondent
No.4 is willing to match the same. Mr. Narvankar would submit that
the Petitioner is willing to revise his financial bid. In Ram & Sham
Company vs. State of Haryana 7 the Apex Court has recognized the
principle of rebidding between the two contesting parties for the
purpose of ensuring that the tendering authority achieves best rates.
Since both Petitioner and Respondent No.4 are willing to renegotiate
their financial bids, Respondent Nos.1 to 3 shall, after opening the
financial bid of the Petitioner, invite both the parties for negotiations
and award the contract to the party quoting the lowest rates.
26. The Petition accordingly succeeds partly and we proceed to
pass the following order :-
i) Order dated 4 October 2024 adjudging Petitioner’s bid
as non-responsive is set aside.
ii) Petitioner is held eligible for opening of the financial bid
and its financial bid be accordingly opened.
iii) After opening of Petitioner’s financial bid, the tendering
authority shall invite both Petitioner and Respondent7 MANU/SC/0017/1985
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award tender to the entity offering the lowest bids. It is
clarified that except Petitioner and Respondent No.4 no
other bidder will be entitled to participate in the
renegotiation process.
27. With the above directions, the Petition is partly allowed and
disposed of. Rule is made partly absolute. There shall be no order
as to costs.
(SANDEEP V. MARNE, J.) (CHIEF JUSTICE) Digitally signed by SUDARSHAN SUDARSHAN RAJALINGAM RAJALINGAM KATKAM KATKAM Date: 2025.06.24 17:41:15 +0530 k Page No. 20 of 20 ::: Uploaded on - 24/06/2025 ::: Downloaded on - 24/06/2025 22:14:25 :::