Supreme Court Restores Tender Award in Dispute Between Sam Built Well and Deepak Builders

The Supreme Court of India, in the case of M/s Sam Built Well Pvt. Ltd. vs. Deepak Builders & Others, ruled on a major tender dispute regarding the construction of the Institute of Nano Science and Technology Campus at Knowledge City, Mohali. The Court set aside the Punjab and Haryana High Court’s Division Bench ruling, thereby restoring the tender award to Sam Built Well Pvt. Ltd.

Background of the Case

The dispute originated from a notice inviting tenders (NIT) dated March 16, 2017, issued by the Director of the Institute of Nano Science and Technology, Mohali. The tender was for constructing research, academic, administrative, hostel, residential, and utility buildings at an estimated project cost of Rs. 162.18 crores. The last date for submission of bids was April 10, 2017.

One of the key eligibility criteria under Clause 8 of the NIT required that contractors must have completed projects of certain minimum values:

• Three similar completed works, each costing at least Rs. 64.9 crores, or
• Two similar completed works, each costing at least Rs. 97.3 crores, or
• One similar completed work of aggregate cost not less than Rs. 129.7 crores.

“Similar work” was defined as the construction of institutional/educational buildings campus with a minimum five-storey RCC framed structure, including electrical, plumbing, firefighting, and HVAC works under a composite contract.

Petitioner’s (Sam Built Well Pvt. Ltd.) Arguments

The petitioner argued that:

• The respondent Deepak Builders failed to meet the eligibility criteria as per Clause 8 of the NIT.
• Technical evaluation reports by expert committees disqualified Deepak Builders due to non-compliance with eligibility requirements.
• Three expert committees, including Tata Consultancy Services and the Building Works Committee of the Institute, had all stated that Deepak Builders was ineligible.
• The High Court’s Division Bench, in allowing Deepak Builders’ appeal, exceeded the limits of judicial review by overriding technical expert opinions.

Respondent’s (Deepak Builders) Arguments

Deepak Builders countered by asserting:

• They had completed similar works, including projects such as the District Administrative Complex, Office Building of Punjab Mandi Board, and Judicial Court Complex.
• The expert committees wrongly applied the National Building Code of India, 2016, while evaluating eligibility.
• The Division Bench of the High Court correctly ruled that the petitioner was eligible to bid and directed the consideration of its financial bid.

Supreme Court’s Observations

The Supreme Court, in a judgment delivered by Justice R.F. Nariman and Justice Navin Sinha, made the following critical observations:

“The Division Bench does not state that the three expert committees have arrived at a perverse conclusion. To merely set aside the judgment of the learned Single Judge and then jump to the conclusion that Respondent No.1’s tender was clearly eligible would be directly contrary to settled judicial principles.”

Other key findings included:

• Judicial review in tender matters must be limited, particularly where technical evaluations are involved.
• The High Court failed to identify malafides or perversity in the expert committee reports but still overturned them.
• Technical evaluations should be respected unless shown to be biased or fundamentally flawed.
• The principles set in Afcons Infrastructure Ltd. vs. Nagpur Metro Rail Corporation Ltd. (2016) and Montecarlo Ltd. vs. NTPC Ltd. (2016) were applicable, emphasizing deference to expert decisions in technical matters.

Final Judgment

The Supreme Court ruled as follows:

• Set aside the Punjab and Haryana High Court’s Division Bench ruling.
• Restored the Single Judge’s decision upholding the technical disqualification of Deepak Builders.
• Reaffirmed that Sam Built Well Pvt. Ltd. was the rightful awardee of the tender.
• Ordered that the contract awarded to Deepak Builders be nullified.

Impact of the Judgment

The ruling has significant implications for government tenders and judicial intervention in technical matters:

• Limits judicial overreach: Reinforces that courts should not interfere in technical evaluations unless there is evidence of malafides or irrationality.
• Strengthens the role of expert committees: Ensures that independent technical assessments are not arbitrarily overturned.
• Ensures fair tendering processes: Confirms that eligibility criteria must be strictly applied to maintain integrity in bidding.
• Encourages transparency: Highlights the importance of objective, evidence-based decision-making in tender allocations.

The Supreme Court’s decision in this case ensures that government contracts are awarded based on merit and compliance with technical criteria rather than subjective judicial interpretation.

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Download Judgment: Ms Sam Built Well P vs Deepak Builders & Ot Supreme Court of India Judgment Dated 14-12-2017.pdf

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