Persons Ineligible To Participate In Tender Process Can't Overcome Disqualification By Entering Into Joint Venture: Punjab & Haryana High Court

The bench comprising Chief Justice Ravi Shanker Jha and Justice Arun Palli observed that the constituent members of the Joint Venture were not eligible to apply and obtain the contract and Joint Venture was constituted only to overcome the disqualification.

"A perusal of the Joint Venture Agreement would indicate that there is no clause indicating as to who would be managing the Joint Venture. On the contrary, the document indicates that in spite of constituting the so called Joint Venture, the constituents/ proprietors would continue to manage their own separate firms."

The court noted that a Joint Venture agreement was constituted by the petitioner after the issuance of NIT only to overcome the disqualification suffered by them under the relevant clauses of the agreement.

It is pertinent to note that a perusal of the eligibility condition contained in the NIT makes it clear that the tenderer should be either a proprietorship concern, a partnership firm or an incorporated company and own its entity. In these circumstances, it is evident that the attempt of the petitioner to obtain the contract by entering into a Joint Venture agreement with other individual was only to overcome the disqualification suffered under the relevant clauses of the agreement.

It further rejected the contention of the petitioner that the tender was floated only to favor the private respondent by stating that the lowest tender out of two tenders that got shortlisted was ultimately allotted the tender.

"The condition requiring one year experience for supplying gypsum to Government/semi Government organizations, ex-facie, can be fulfilled by any person or entity in the trade. There is no allegation or assertion in the petition to indicate that the condition is tailor-made, incorporated to favour the private respondent alone and that there is no other person to fulfill the conditions prescribed. No such averment or specific details have been mentioned in the petition either in this regard...ultimately two tenders were shortlisted and as the rates of the private respondent were found to be lowest, therefore, tender was allotted to it."

Therefore, in light of the observations made, the court dismissed the petition for being sans merit.

Case Title: Sharma Constructions Joint Venture Versus Punjab Agro Industries Corporation Ltd. and another

Citation: 2022 LiveLaw (PH) 122