Supreme Court judgment | Public procurement

Supreme Court on Tender Eligibility and Judicial Review: Sam Built Well v Deepak Builders

Published: 20 December 2017 | Legal context updated: 1 November 2026

In M/s Sam Built Well Pvt. Ltd. v. Deepak Builders & Others, the Supreme Court of India restored the tender award in favour of the appellant after finding that the High Court Division Bench had exceeded the limited scope of judicial review by substituting its own assessment for the findings of technical experts. The decision, delivered on 14 December 2017, remains an important authority on eligibility conditions and judicial restraint in public procurement.

Background: construction tender at Mohali

On 16 March 2017, the Director of the Institute of Nano Science and Technology, Mohali, issued a notice inviting tenders (NIT) for construction of its campus at Knowledge City, Sector 81, Mohali. The project included research, academic and administrative buildings, hostels, residences and other utility and amenity buildings. The estimated project cost was Rs. 162.18 crore, with earnest money of Rs. 1.72 crore. The prescribed completion period was 20 months, and the last date for bids was 10 April 2017.

The procurement used a two-bid system. Clause 8 of the NIT required relevant prior experience in similar work. Of 16 prospective bidders, five ultimately participated. Deepak Builders submitted its tender on 7 April 2017, but a technical evaluation report dated 24 April 2017 found that it did not satisfy Clause 8. Tata Consultancy Services and the Institute's Building Works Committee also reached the conclusion that the bidder was ineligible.

Proceedings before the High Court

Deepak Builders challenged its disqualification. The Single Judge dismissed the writ petition, concluding that the experience claimed did not meet the requirement of similar work for a campus comprising multiple kinds of buildings. The Single Judge also gave weight to the consistent conclusions of three technical expert bodies and the restricted scope of judicial review of such assessments.

On 4 August 2017, the Division Bench reversed the Single Judge. Although it found no mala fides, it concluded that Deepak Builders was eligible and directed consideration of its bid with the other eligible bids. Following that decision, a tender was awarded to Deepak Builders on 20 August 2017. Sam Built Well approached the Supreme Court.

Questions before the Supreme Court

• Could the appellate court replace a technical eligibility assessment without identifying mala fides, perversity or a comparable legal defect?
• How should the term similar work in the NIT be assessed by the tendering authority?
• What relief should follow when a contract has already been awarded pursuant to a judgment subsequently set aside?

Supreme Court decision and reasoning

The Bench of Justices R. F. Nariman and Navin Sinha held that the Division Bench had travelled beyond the proper limits of judicial review. Three expert bodies had found Deepak Builders ineligible, and the Division Bench neither identified mala fides nor held their conclusions to be perverse. Reappraising the technical merits as though exercising an appellate jurisdiction was therefore unjustified.

The Supreme Court set aside the Division Bench judgment and restored the Single Judge's order. It also set aside the tender awarded to Deepak Builders on 20 August 2017 and restored the award to Sam Built Well. The appellant had offered to match Deepak Builders' price; the Court left it open to the Institute to accept that offer. The appeal was allowed without an order as to costs.

Legal principles explained

Article 14 of the Constitution: equality and non-arbitrariness

Article 14 guarantees equality before the law and equal protection of the laws. In public procurement, decisions of State authorities and public bodies are subject to constitutional standards of fairness and non-arbitrariness. Article 14 does not, however, permit a court to substitute its preferred commercial or technical evaluation merely because another view is possible.

Article 226: judicial review by High Courts

Article 226 empowers High Courts to issue writs and directions for enforcement of fundamental rights and for other purposes. In tender disputes, judicial review primarily examines the legality of the decision-making process, including arbitrariness, mala fides, irrationality and violation of mandatory tender conditions, rather than undertaking a fresh technical assessment of bids.

Notice inviting tender and eligibility criteria

A notice inviting tender (NIT) is the procurement invitation specifying the work, eligibility conditions, bidding process and contractual requirements. An essential eligibility condition is a mandatory qualification a bidder must meet. A technical evaluation is the assessment of whether a bid satisfies prescribed technical and experience requirements. The authority that drafted the tender ordinarily has expertise in interpreting its requirements, subject to legal review where its decision is arbitrary or otherwise unlawful.

Meaning of mala fides and perversity

Mala fides refers to bad faith or an improper purpose. Perversity describes a conclusion so unreasonable or unsupported by relevant material that it cannot be sustained. The Supreme Court found that neither defect had been established in the expert assessments in this case.

Relevant precedents and later developments

The 2017 judgment applied the established approach reflected in Afcons Infrastructure Ltd. v. Nagpur Metro Rail Corporation Ltd., (2016) 16 SCC 818, and Montecarlo Ltd. v. NTPC Ltd., (2016) 15 SCC 272, which emphasize restraint in the judicial review of technical and commercial tender decisions.

Subsequently, in N.G. Projects Ltd. v. Vinod Kumar Jain (2022), the Supreme Court reiterated that courts should be cautious about interfering with infrastructure contracts and should consider public interest and the consequences of disrupting procurement. In Tata Motors Ltd. v. Brihan Mumbai Electric Supply & Transport Undertaking (2023), the Court likewise examined the limited role of judicial review in public tenders. These later judgments provide context; they do not alter the historical outcome of the 2017 appeal.

Read the official N.G. Projects judgment (2022) and the Supreme Court of India website for judicial resources.

Practical significance for bidders and authorities

The ruling underscores that a tender bidder should document compliance with each essential eligibility criterion, especially experience requirements such as similar work. Procurement authorities should apply published criteria consistently, preserve reasoned technical evaluation records and avoid arbitrary treatment. Courts may intervene where a recognized ground for judicial review is established, but they are not substitutes for technical committees.

Important qualification: This judgment does not mean that all expert evaluations are immune from challenge. Each dispute turns on its tender documents, the authority's conduct, applicable procurement rules and the evidence of illegality, arbitrariness or procedural unfairness.

Read the Supreme Court judgment

Official Supreme Court judgment dated 14 December 2017 (PDF)

Read the judgment PDF hosted on LawDadi

This article discusses a judgment delivered in 2017 and includes later legal context for general information. Tender conditions and applicable procurement rules should be checked for each current transaction.