19 June 2025 Partnership >> Business & Commercial Law   |   Civil Writ Petition >> Civil & Consumer Law  

In a significant judgment delivered on June 19, 2025, the High Court of Judicature at Bombay, comprising Chief Justice Mr. Alok Aradhe and Justice Mr. Sandeep V. Marne, dismissed a petition challenging the eligibility of a partnership firm, Respondent No. 6, in a tender process for leasing warehouses. The ruling reinforces the principle that the experience and financial standing of individual partners can be considered when evaluating a partnership firm's eligibility in a tender, particularly in commercial transactions.

The petitioner, Nitin Laxmidas Dama, had filed a writ petition seeking to disqualify Respondent No. 6 from the tender process initiated by the State of Maharashtra and its Ministry of Dairy Development for the allotment of 16 warehouses and one Central Store Office on a 30-year lease. The petitioner argued that Respondent No. 6, a partnership firm established just 20 days before the tender notice, could not meet the mandatory financial eligibility criteria, which required an annual financial turnover and net worth exceeding Rs. 50,00,000/- for each warehouse for the previous three years. The petitioner also contended that Respondent No. 6 failed to submit proper income tax returns, professional tax returns, and GST certificates, and improperly relied on the personal net worth of a director of one of its partners.

Conversely, the respondents argued that the tender document permitted companies, institutions, partnership firms, and individuals to submit bids, and that relying on individual partners' financial statements was permissible and supported by legal precedents. They cited Supreme Court judgments like New Horizons Limited and another v. Union of India and others and Master Marine Services (P.) Ltd. v. Metcalfe & Hodgkinson (P.) Ltd. , which held that experience and financial capability could be attributed from the constituents of a bidding entity, not just the entity itself. It was also highlighted that Respondent No. 6 had bid for 10 warehouses compared to the petitioner's 7, and the tender notice gave preference to bidders seeking a higher number of warehouses.

The High Court meticulously analyzed the arguments and the relevant tender conditions. It found that the objection regarding the partnership firm's recent constitution was "wholly untenable" as it was a valid legal entity capable of participating. Crucially, the Court adopted the reasoning from New Horizons Limited, stating that the "past experience and financial credentials of partners of Respondent No. 6-Firm are required to be considered as experience and financial credentials of the partnership firm as well". The Court emphasized that the purpose of eligibility conditions is to ensure financially capable bidders, and judicial review in such commercial matters is limited to cases of arbitrariness, mala fides, bias, or irrationality.

The Court further noted that the tendering authority had exercised its discretion in adjudging the net worth of Respondent No. 6 based on documents submitted by the director of one of its partners, and the Court would not sit in appeal over such discretion. It also highlighted that the petitioner had not raised objections about Respondent No. 6's technical eligibility at the time bids were opened, thereby being "estopped" from doing so at a later stage.

Ultimately, the High Court found no "perversity, irrationality or arbitrariness in the impugned tender process". While the petitioner had secured the allotment of one warehouse and the Central Store Office, his petition seeking disqualification of Respondent No. 6 for the remaining seven warehouses was dismissed. The ruling underscores a pragmatic approach in tender evaluations, focusing on the real capacity of the bidding entity, even if it is derived from its individual constituents.