Holding

A government‑owned corporation and its 100% wholly‑owned subsidiaries are to be treated as a single entity for tender eligibility, allowing the subsidiary experience to satisfy the experience norm.

Summary

The appellant, a government-owned corporation formed by the merger of two Chinese rail manufacturers and their wholly‑owned subsidiaries, submitted a bid for a metro rolling‑stock project. The respondent rejected the bid, stating that the appellant lacked the required experience under clause 2.4 of the tender documents because it had not formed a joint venture or consortium with its subsidiaries. The appellant argued that, as a single entity comprising 100% wholly‑owned subsidiaries, it could count their experience. The Supreme Court examined clause 4.1 of the Instructions to Bidders, which permits a "single entity" or a combination of entities in a JV/consortium, and held that a government‑owned entity with its wholly‑owned subsidiaries qualifies as a single entity. Consequently, the appellant could rely on its subsidiaries' experience, making the disqualification illegal, arbitrary and perverse. The Court allowed the appeal, setting aside the High Court’s order and restoring the appellant’s eligibility.

Issues considered

The interpretation of clause 4.1 of the tender documents regarding whether a government‑owned corporation and its wholly‑owned subsidiaries constitute a "single entity" for eligibility.
Whether the experience of wholly‑owned subsidiaries can be counted towards the experience requirement under clause 2.4 when the bidder submits as a single entity without forming a joint venture or consortium.

Subjects

tender eligibilitygovernment owned entitysubsidiary experiencejoint ventureconsortiumpublic procurementdisqualificationcorporate veil

Judgment

[2017] 5 S.C.R. 87

MIS. CRRC CORPORATION LTD. A
v.
METRO LINK EXPRESS FOR GANDHINAGAR &
AHMEDABAD (MEGA) COMPANY LTD.
(Civil Appeal No. 12065 of2016) B
MAYlS,2017
[DIPAK MISRA AND AMITAVA ROY, JJ.]
Contract:
Respondent company inviting tenders/bids for a Project - C
Determination of the eligibility and qualification criteria before
opening 'technical bids' and 'price bids' of the bidders - Bid of the
appellant-Corporation rejected disqualifying it for further
participation, on the ground of deficiency in experience in terms of
cl. 2.4 of Section Ill of Tender Documents - Whether the appellant- D
Corporation, to meet the experience norm, as prescribed by cl. 2.4,
could utilize the experience of its subsidiary companies (not being
the constituents of Joint venture or a Consortium) to qualify in the
initial bid - Held: As per cl. 4.1 of s.1 of Instructions to Bidders, a
bidder can be a single entity or a combination of such entities in
the form of a Joint Venture or a Consortium - A single entity would E
include a Government owned entity with its I 00% wholly owned
subsidiaries eligible to bid in terms of clause 4.1 of the tender
conditions - Appellant-Corporation is a Government owned
Corporation - Therefore, disqualification of the appellant-
Corporation is unsustainable being grossly illegal, arbitrary and F
perverse.
Allowing the appeal, the Court
HELD: 1. A plain reading of clause 4.1 of Section 1 of
Instructions to Bidders reveals that a bidder can be a single entity
or a combination of such entities in the form of a Joint Venture or .G
a Consortium under an existing agreement or with the intent to
enter into such an agreement supported by a letter of intent.
Thus a single entity has been construed to be a valid bidder for
all intents and purposes. [Para 34) (111-A)
H
87
88 SUPREME COURT REPORTS [2017] 5 S.C.R.

A 2. A single entity would assuredly include such a
government owned entity along with its 100% wholly owned
subsidiaries. This is more so on the touchstone of otherwise
imperative facilitation of a broad based participation of entities
with competing worth and capabilities, in the overall interest of
B the timely and quality execution of a public project. Having regard
to the magnitude of the project as well as the experience and
expertise essential for the quality execution thereof, there seems
to be no justification to infer, at the first place, to exclude a
government owned entity with its 100% wholly owned subsidiaries
to be ineligible to participate in the process. [Para 35] [111-B-D]
c 3. The status and the entitlements of the appellant-
corporation, as already adjudicated in *Consortium of Titagarh
Firema Adler SPA case, as a single entity bidder in the present
tender process would also by the yardstick of simple logic and
analogy be available to it. Absence of the words "government
D owned entity" in clause 4.1, presently under consideration, is of
no consequence. In clause 4.1 involved in *Consortium of Titagarh
Firema Adler SPA case, "government owned entity" had been
contemplated as one of the bid.de rs in contradistinction to "private
entity" and "any combination of such entities" in the form of a
joint venture ..... The expression used in the present clause 4.1
E being "single entity", understandably, it is inclusive of a private
as well as a government owned entity. The unit envisaged as a
single entity is thus independent of any combination or formption
in the form of a Joint Venture or a Consortium and thus is
visualised to be one integral and composite whole. In such a logical
F premise, a government owned company with its 100% wholly
owned subsidiaries has to be comprehended as a single entity,
eligible to bid in terms of clause 4.1 of the tender conditions and
is to be regarded as single, coherent and homogeneous existence
and not a disjointed formation. [Para 37] [111-G, H; 112-A-D]
G 4. The queries and the clarifications, relatable to the discord,
do not substantiate the plea of the respondent in any manner
whatsoever. The foundation of rejection of the appellant's bid is
the clarification to the query mainly at serial No. 50. It is patent
therefrom that it was in response to a query made by a subsidiary
company to allow for its benefit, the experience of the parent
H •
MIS CRRC CORPORATION v. METRO LINK EXPRESS FOR 89
GANDHINAGAR&AHMEDABADCOMPANY

company/group companies to meet the qualification requirement A
with regard thereto. It was in that context that the clarification
furnished was that the subsidiary company/group companies may
bid together with the parent company as Joint Venture/
Consortium member, for parent/group company's experience to
be taken into account. This clarification was extended and applied B
vis-a-vis the appellant qua clauses Nos. 2.4.1, 2.4.2(a), 2.4.2(b)
and 2.4.2.(c) to disqualify it on the ground that on stand alone
basis, it was deficient in the experience prescribed and that it
could not have availed of the experience of its subsidiary
companies. This clarification has no application to its case and,
therefore, the decision to disqualify it on this ground is apparently c
arbitrary, discriminatory, unreasonable, illogical and non-
transparent, thus rendering the same irreversibly illegal, unjust
and unfair. The interpretation offered by the respondent and
endorsed by the High Court in the contextual framework is thus
patently impermissible and absurd. [Para 38] [113-A; 112-D-H]
D
5. Not only the appellant Corporation had offered its
responses to the clarifications sought for, its status as a
government owned corporation, by no means, has been disputed
by the respondent. Further, in the face of its demonstrated
structural integrity and functional unity qua its subsidiaries with
all consequential legal implications, the apprehension of the E
respondent that the subsidiary companies of the appellant, if
necessity so arises, would not be available for the execution of
the project, not being a party to the contract, to say the least, is
speculative, unfounded, farfctched and wanting in reason and
rationale. Whether the subsidiary companies of the appellant F
would be responsible for the execution of the work, is evinced
by the formational specifics and functional dynamics of the
appellant and its wholly owned subsidiary companies, as noticed
in *Consortium of Titagarlt Firema Adler SPA case in the
affirmative and does not call for further dilation. [Para 39) [113-
B-D] G
6. Therefore, the impugned disqualification of the appellant
on the ground of deficiency, in experience in terms of clause 2.4,
is unsustainable in law and on facts being grossly illegal, arbitrary
and perverse. [Para 40) [113-E)
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90 SUPREME COURT REPORTS [2017] 5 S.C.R.

A *Consortium of Titagarh Firema Adler SPA -Titagarh
Wagons Ltd. v. Nagpur Metro Rail Corporation Limited
(2017) 7 sec 486 - relied on.
New Horizons Ltd. and another v. Union of India and
others (1995) 1 SCC 478 : [1994] 5 Suppl. SCR 310;
B A/cons Infrastructure Ltd. v. Nagpur Metro Rail
Corporation Ltd. & Am: 2016 (8) SCALE 765: (2016]
3 SCR 551; Tamil Nadu Generation and Distribution
Corporation Ltd. v. CSEPDI - Trishe Consortium 2016
(10) SCALE 69 : [2016] 7 SCR 495; MontecariO Ltd.
v. NTPC Ltd. 2016 (10) SCALE 50 : [2016) 8 SCR
c 224; Core Projects and Technologies Ltd. v. The State
of Bihar 2011 (59) BLJR 183; Rohde and Schwarz
Gmbh and Co. Kg. v. Airport Authority of India and
Anr. (2014) 207 DLT 1 - referred to.

D Case Law Reference

[1994) 5 Suppl. SCR 310 referred to Para 22

[2016] 3 SCR 551 referred to Para 23

E (2016) 7 SCR 495 referred to Para 23

[2016) 8 SCR 224 referred to Para 23

2011 (59)_ BLJR 183 referred to Para 23

F (2014) 207 DLT 1 referred to Para 23

(2017) 1 sec 486 relied on Para 24

CIVIL APPELLATE JURlSDICTION: Civil Appeal No. 12065
of2016.
G •
From the Judgment and Order dated 18.11.2016 of the High Court
of Gujarat atAhmedabad in Special Civil Application No. 18439of2016.
C. A. Sundaram, Sr. Adv., Prabhjit Jauhar, Galav Sharma,
Ms. Anupama Kaul, M. P. Singh, S. S. Jauhar, Advs. for the Appellant.

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MIS CRRC CORPORATION v. METRO LINK EXPRESS FOR 91
GANDHINAGAR&AHMEDABADCOMPANY

Mukul Rohatgi, AG., MaheshAgarwal,Abhinav Agrawal, Munjaal A
Bhatt, Rishabh Parikh, E. C. Agrawala, Advs. for the Respondent.

The Judgment of the Court was delivered by

AMITAVA ROY, J. I. The dissension centers around the
exposition of an eligibility norm engrafted in the tender conditions qua a B
prestigious project with global participation. The appellant stands
disqualified by the respondent on the touchstone of its perception of the
relevant qualifying criterion as endorsed by the High Court vide judgment
and order dated 18.11.2016 rendered in Special Civil Application No.18439
of2016, thus propelling it to this Court for redress.
c
2. We have heard Mr. C.A. Sundaram, learned senior counsel for
the appellant and Mr. Mukul Rohatgi, learned senior counsel for the
respondent.

3. The pleaded facts though encompass various facets, those
having a direct bearing on the issue raised, only would be alluded to. D

4. The appellant-corporation has introduced itself to be an amalgam
of Mis. CSR Corporation Ltd. and Mis. CNR Corporation Ltd., both
claimed to be the world's largest and oldest suppliers of rail transport
equipments with most complete product lines and leading technologies
.
with their business
., activities enfolding R&D design, manufacture, repair,
sale, lease and technical services for railway rolling stock, EMUs, metro
E

coaches, urban rail transit vehl.Cies, engineering machinery, consulting
services etc. along with several subsidiaries under their full control. On
09.03.2015, these two entities namely; Mis. CSR Corporation Ltd. and
Mis. CNR Corporation Ltd. got merged after securing the approval of F
the concerned state authorities, as a result whereof, all assets of these
·two integrant corporations, together with liabilities, businesses,
qualifications, staff, contracts along with all rights and obligations stood
transferred to the appellant-corporation w.e.f. 01.06.2015. Following such
assimilation, the appellant-corporation was, as a joint stock limited
company incorporated in the Peoples Republic of China with limited G
liability and owned and controlled by the Chinese Central Government.
As a consequence of such merger, the subsidiaries of Mis CSR.
Corporation Ltd. and Mis CNR. Corporation Ltd., became the subsidiaries
of the appellant-corporation and their names were changed as well.
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92 SUPREME COURT REPORTS [2017] 5 S.C.R.

A According to the appellant, thereafter it successfully participated and
was awarded various international contracts, based on the experience
of its subsidiary companies.
5. On 15.01.2016, the respondent company (hereinafter to be
referred to also as "MEGA") invited tenders/bids for the project "Design,
B manufacture, supply, installation, testing, commissioning of96 nos. of
standard gauge cars and training of personnel" and organized a pre-bid
meeting, amongst others on 12.03.2016 inviting all prospective bidders.
The last date for submission of the bids was eventually fixed on
25.05.2016.
c 6. As per the tender conditions, the offer was to be made in three
envelopes, to be submitted simultaneously, as hereunder:
(i) First Envelope called - "Initial Filter-cum-Qualification
Requirement Bid''.
D (ii) Second Envelope - "Technical Bid"
(iii) Third Envelope - "Price Bid"
7. In response to the notice inviting tender, the appellant and three
others namely; (i) Consortium of Bombardier Transportation India Pvt.
E Ltd. & Bombardier Transportation GmbH; (ii) Mis. Hyundai Rotem
Company (HRC) and (iii) Consortium of Alstom Transport India Ltd.,
& Alstom Transport SA, offered their bids by the date fixed.
8. As per the tender prescriptions, an affirmative determination of
the eligibility and qualification criteria, on the basis of the particulars
F furnished in the first envelope was to be the pre-requisite for the opening
of the envelopes containing the "technical bids" and the "price bids" in
that order applying the same test. Prior thereto, pre-bid meetings were
held, as referred to hereinabove, in which representatives of various
participating bidders attended and submitted their queries for clarifications
as per clause No.7 oflnstructions to Bidders, which were accordingly
G deliberated upon. Clarifications, as sought for, were furnished accordingly.
The appellant has averred that it did submit the envelopes, as required,
containing all essential documents/certificates, as mandated fulfilling,
amongst others, the requirements of the General/Specific Experiences.
On 25.05.2016, as scheduled, the envelopes containing the "Initial Filter-
H
MIS CRRC CORPORATION v. METRO LINK EXPRESS FOR 93
GANDHINAGAR&AHMEDABAD COMPANY [AMITAVAROY, J.]

cum-Qualification Requirement Bid" of the four bidders were opened A
and thereafter on 09.06.2016, the respondent raised 16 queries and
required the appellant to submit its response thereto.

9. The queries, amongst others, related to the norm of experience
as contained in clause 2.4 of Section III of the Tender Documents. It is
inessential to detail the queries and the replies offered by the appellant, B
having regard to the focused contentions raised before us, as would be
referred to shortly hereinafter. Suffice it to state, as claimed by the
appellant, it did adequately and completely answer the queries and
supplemented the same with contemporaneous records.

10. It was thereafter that the appellant came to learn that the c
respondent on 15. I 0.2016 had rejected its "Initial Filter-cum-Qualification
Requirement Bid" and thus had disqualified it for further participation in
the tender process. The appellant thereafter unsuccessfully pleaded
with the respondent corporation by filing various representations and
requests and the same having failed to evoke any affirmative response, D
sought refuge of the legal process. Prior thereto, it was served as well
with a caveat application filed by the respondent in the High Court
mentioning about its disqualification following the rejection of its "Initial
Filter-cum-Qualification Requirement Bid" .
11. The respondent-corporation, apart from raising preliminary E
objection to the maintainability of the writ petition filed by the appellant,
pleading non-joinderofnecessary parties, i.e. the surviving tenderers in
the fray, asserted that the project was financed through budgetary
resources of State of Gujarat, Government of India and Japan
International Co-operation Agency (for short hereinafter to be referred
to as "JICA"). It also mentioned that through international competitive F
Bidding, the General Engineering Consultant, which is a consortium of
four renowned companies, had been appointed to provide independent
expert professional advice regarding the preparation of tender documents,
evaluation of tender offers etc. for works related to the Ahmadabad
Metro Rail Project - Phase I, i.e. the project in hand. While generally G
admitting the facts pertaining to the issuance of the notice inviting tender
on 15.01.2016 and the participation of the four bidders including the
appellant, MEGA, however, categorically asserted that in course of the
pre-bid meetings, it was clarified in response to a pointed query, that the

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94 SUPREME COURT REPORTS [2017) 5 S.C.R.

A experience of subsidiary companies/group companies will not be taken
into account in any case and that if the parties are desirous of such
experience being counted, the subsidiary companies/group companies
would have to form a Joint Venture (hereafter referred to also as "JV")
or a Consortium.
B 12. According to it, the first envelope containing the "Initial Filter-
cum-Qualification Requirement Bid" of the participating bidders were
opened in presence of their representatives and on the next date, those
were forwarded to the General Engineering Consultant (for short,
hereinafter referred to as "GEC") for evaluation thereof and submission
ofreport in connection therewith. The GEC, in turn, vide its letter dated
C 09.06.2016 submitted its interim report recommending that further
clarifications be sought for from the respective bidders, on the points as
outlined therein. It was thereafter that the respondent forwarded 16
queries to the appellant inter alia on the aspect of experience, as
contemplated in clause 2.4 of the Evaluation and Qualification Criteria
D of the tender documents.
13. It is the stand of the MEGA that the appellant, instead of
furnishing the clarifications as sought for, submitted additional details,
thereby virtually revising its original offer and further endeavoured to
make up the deficiency in its experience, as prescribed, by falling back
E on the experience of its so called subsidiary companies. According to
MEGA, as the subsidiary companies of the appellant, retained their
independent existence as separate legal entities, their experience, in terms
of the relevant tender norms, could not be counted to be that of the
appellant as it (appellant) did submit its offer as a single entity and neither
as a joint venture nor as a consortium with its subsidiary companies.
F Though in its reply, the MEGA also expressed its reservation with regard
to the appellant's stand alone financial credentials, it is unnecessary to
refer thereto, as the same did not figure in course of the rival exchanges
in the appeal.
14. The GEC, according to the MEGA, after scrutinizing the bid
G documents together with the clarifications re-laid before it, opined that
the appellant was found to be non-responsive to the requirements of
clauses 2.3 and 2.4 of Section ill relating to "Evaluation and Qualification
Criteria" of the "Tender Document". It would be sufficient for the present
purpose to extract the relevant excerpt of the findings of the GEC vis-a-
H vis clauses 2.4. l and 2.4.2 for immediate reference:
MIS CRRC CORPORATION v. METRO LINK EXPRESS FOR 95
GANDHINAGAR&AHMEDABAD COMPANY [AMITAVA ROY, .T.]

Relevant Eligibility and Gist of Finding arrived at by A
Clauses
Qualification Criterion of GEC
Tender Document in question

2.4.l General Experience B
Experience in the role of prime CRRC does not meet this
contractor (single entity or JV' criterion. Since the Parent
member), Subcontractor, or Company cannot claim
management contractor for at experience of its Subsidiary
least last ten (10) years starting Company even if it has 100%
I" January, 2006. ownership as long as a c
company is a separate legal
entity. CRRC has submitted
its offer as a sole Bidder. It
haLJ!J.iQ__n o !__,§_u b •ni.!t,_g __l!JJY.
intent of forming a joint
venture/consortium with its D
Subsidiary Companv.
supported by a letter of intent
in terms of ITB para 4.1. As
per pre-bid meeting
clarification issued to ail
bidders 'The subsidiary E
company/group company may
bid together with the parent
company as a DV /consortium
member for parents/group
company experie.nce to be
taken into account.
F
2.4.2 Specific Experience

(a) A minimum number of two (2) CRRC docs not _meet this
similar contracts that have criterion since t!i.,
been satisfactorily and execution/completion of any
substantially completed as a contract by its Subsidiary G
prime contractor considered in companies cannot be
favour considered of CRRC considcn::_tjjn f~.Y.QJ!.LQL CR.R_i:_.
(single entity or JV member)
between I ' 1 January, 2006 and
the Bid submission deadline.
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96 SUPREME COURT REPORTS [2017] 5 S.C.R.

A 15. This report dated 28.07.2016 of the GEC was thereafter
forwarded to JICA for its concurrence and the latter gave its "no
objection" and instructed MEGA to proceed with the technical evaluation
of the bids of the remaining bidders and to finalize the process early.
16. Accordingly, the remainingthree bidders were declared to be
B qualified at the stage of "Initial Filter-cum-Qualification Requirement
Bid" by discarding the appellant, as it failed to fulfill the requirements
contemplated in clause 2.3 "Financial Situation" and clause 2.4
"Experience" of Section III of the "Evaluation and Qualification Criteria"
of the "Tender Document".

c 17. According to MEGA, the appellant was intimated of its
disqualification by letter dated 02.11.2016. It has maintained that the
impugned action is strictly in accordance with the tender norms and
being objective and transparent, is unassailable.
18. Referring to clause 4. 1 of Section I of the "Tender Document",
D the appellant, in reiteration, pleaded that the clarification referred to by
MEGA excluding the experience of the subsidiary/group companies from
being accounted for in absence of a joint venture or consortium was in
respect of a query in a totally different context and was wholly inapplicable
to its bid. According to the appellant, the query was raised by a subsidiary
company before the respondent as to whether it could avail the experience
E of its parent/group company and in response thereto, it was explained
that if a subsidiary company did wish to use the experience of the parent
company, the parent company or the group company should form with it
a Consortium or a N, as the case may be. The appellant thus insisted
that it having submitted its bid, as a single entity being the holding company
F of its subsidiaries and had claimed the experience of its fully owned
subsidiaries, the clarification relied upon by the GEC and acted upon by
MEGA to oust it (appellant) from the process as disqualified, was.patently
flawed. It further stood by its responses to the queries made, contending
that those adequately did answer the same and demonstrate that its bid
was fully compliant of the essential tender conditions.
G
19. The High Court on an analysis of clause 2.4 of the "Evaluation
and Qualification Criteria" contained in Section III of the "Tender
Documents", in the backdrop of the rival orientations founded on the
pleaded facts and the documents in support thereof, held that while a
holding company may control its subsidiary companies, which may have
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MIS CRRC CORPORATION v. METRO LINK EXPRESS FOR 97
GANDHINAGAR&AHMEDABADCOMPANY[AMITAVAROY,J.)

the requisite experience, as the subsidiary companies would not be required A
to execute the work, the holding company cannot avail the benefit of
their experience. It was of the view that since the subsidiaries have an
identity separate from the holding company, they ipso facto, by virtue
of they being subsidiaries of the holding company, do not become a party
to the contract and are in no manner liabk to the employer for the
B
execution thereof. It distinguished the contingency, where a J.V. or a
Consortium of different companies/ persons is formed, each constituent
whereof would be liable for execution of the contract. It was of the
estimate that in such a formation of a J.V. or a Consortium, the benefit
of experience of the constituent companies would be available to the
J.V. or a Consortium and not otherwise. In essence, it thus held that the C
appellant-corporation on a stand alone basis, did not possess the requisite
experience, as laid down in the tender conditions and that it was not
permissible for it to avail the experience of its subsidiaries to make up
such deficiency. As a community of interest in the performance of the
work between the appellant and its subsidiary companies, was absent, D
the impugned action of disqualifying it for lack of experience in terms of
clause 2.4 of the "Evaluation and Qualification of Criteria" could not
thus be faulted.
20. To reiterate, the parties before us are at issue only on the
aspect as to whether the appellant-corporation, to meet the experience _E
norm, as prescribed by clause 2.4 of the "Evaluation and Qualification
of Criteria", can utilize the experience of its subsidiary companies to
qualify in the "Initial Filter-cum-Qualification Requirement Bid". No
other contention has been ·raised. The present scrutiny thus would be -
limited only to this facet of the lis.
21. It has been insistently urged on behalf of the appellant that the F
exposition of clause 2.4 of the "Evaluation and Qualification of Criteria"
furnished on behalf ofMEGA and endorsed by the High Court is patently
erroneous and is wholly incompatible with the letter and spirit of clause
4.1 and disregardful of the materials on record pertaining to the
constitution of the appellant and the functional mechanism qua its G
subsidiary companies and is thus liable to be dismissed as absurd, arbitrary
and in defiance oflogic.
22. Mr. Sundaram has argued that it being apparent on the face
of the records that the query in response to which, the clarification
provided by the appellant-corporation was that a subsidiary company/ H
98 SUPREME COURT REPORTS [2017] 5 S.C.R.

A group company may bid together with the parent company as a J.V./
Consortium member, for parent/group company experience to be taken
into account, had been raised by a subsidiary company with a request to
allow the experience of the parent company/ group company to be taken
into account for meeting the qualification requirement of experience of
a subsidiary company. The learned senior counsel has thus maintained
B
that this clarification had no application whatsoever to the appellant-
corporation who had offered its bid as the single entity, as permissible
under clause 4.1 and in view of its formational and functional
configuration, it was legally entitled to avail the experience of its
subsidiaries to meet the tender conditions. According to Mr. Sundaram,
C the disqualification of the appellant-corporation, in this overwhelming
legal and factual premise, is grossly arbitrary, unreasonable and unjust
calling for the intervention of this Court. The learned senior counsel
principally relied in endorsement ofhis assertions on the decision of this
Court in New Horizons Ltd. and another Vs. Union of India and
D others-(1995) I SCC478.
23. In persuasive refutation, learned senior counsel for the
respondent has maintained that as the appellant squarely failed to meet
the technical eligibility, predicated in clauses 2.4.1 and 2.4.2(a),(b) and
(c) on a correct interpretation of the scope and ambit of clause 4.1, in
conjunction with the clarifications provided, no interference with the view
E taken by the High Court is warranted. As admittedly the appellant's
experience sans that of its subsidiaries falls short of the one mandated
by the tender conditions, the impugned action of MEGA is unimpeachable,
he urged. Mr. Rohatgi argued that merely because the subsidiary
companies of the appellant, which by themselves are separate legal
F entities, are eligible in terms of experience, it does not ipso facto confer
eligibility to it (appellant), the parent holding company. According to him,
the appellant having applied as a single entity in the contract if awarded
would be inter se, the appellant and the MEGA and the subsidiary
companies would not figure in the deal, so much so that it would be
impossible to secure their performance or to hold the subsidiary companies
G responsible in case ofan eventuality necessitating such an initiative. The
learned senior counsel argued that as was demonstrable from clause 4.1
as well as 2.4 of the tender conditions in question, the experience of a
subsidiary company was permissible to be availed only ifit was a member
of a J.V. or a Consortium. The appellant, having offered its bid as a
H single entity, as a holding company, it was not entitled to utilize the
MIS CRRC CORPORATION v. METRO LINK EXPRESS FOR 99
GANDHINAGAR&AHMEDABADCOMPANY [AMITAVAROY, J.]

experience of its subsidiary companies to make up the short fall in its A
experience, as prescribed by the tender conditions. While contending
that the dictum in New Horizons Ltd. (supra) was of no avail to the
appellant in the facts of the case, the learned senior counsel sought to
draw sustenance principally from the following decision of this Court:
(1) Afcons Infrastructure Ltd. Vs. Nagpur Metro Rail B
Corporation Ltd. & Anr. - 2016 (8) SCALE 765
(2) Tamil Nadu Generation and Distribution Corporation
Ltd. Vs. CSEPDI - Trishe Consortium - 2016 (IO)
SCALE 69
(3) Montecarlo Ltd. Vs. NTPC Ltd. - 2016 (10) SCALE 50 c
(4) Core Projects and Technologies Ltd. Vs. The State of
Bihar - 2011 (59) BLJR 183
(5) Rohde and Schwarz Gmbh and Co. Kg. Vs. Airport
Authority oflndia and Anr. -(2014) 207 DLT 1 D
24. The contentious pleadings and the assertions based thereon
have been duly evaluated. The issue that confronts the present
adjudicative pur8uit, did fall for the scrutiny of this Court, albeit in the
context of another project, in which the appellant (respondent No. 2
therein) had been awarded the contract, a decision that stood upheld in E
C.A. Nos. 1353-1354 of2017- Consortium ofTitagarh FiremaAdler
SPA -Titagarh Wagons Ltd. vs. Nagpur Metro Rail Corporation
Limited (decided on 9.5.2017). Clause 4.1 dealing with eligibility cnteria
of the prospective tenders, as involved in that decision, deserves
extraction to facilitate an immediate comparison of the text thereof with
/
that of clause 4.1 as involved herein. F
"4.1 A bidder may be a firm that is a private.entity, a government-
owned entity - subject to ITB 4.3 - or any combination of such
entities in the form of a joint venture (N) under an existing
agreement or with the intent to enter into such an agreement
supported by a letter of intent. In the case of a joint venture, all G
members shall be jointly and severally liable for the execution of
the contract in accordance with the contract terms. The JV shall
nominate a representative who shall have the authority to conduct
all business for and on behalf of any and all the members of the
N during the bidding process and, in the event the N is awarded
H
100 SUPREME COURT REPORTS [2017] 5 S.C.R.

A the contract, during contract execution. Unless specified in the
BDS, there is no limit on the number of members in a JV."
25. Section V of the "Tender Documents" of that contract dwelling
on "eligibility criteria and social and environmental responsibility" further
mandated that bidders that are government owned enterprises or
B institutions may participate, only if they can establish that they are (i)
legally and financial autonomous (ii) Operate under commercial law.
26. The award of the contract for "design, manufacture, supply,
testing, commissioning of69 passenger rolling stock (Electrical Multiple
Units)" and training of personnel at Nagpur Metro Rail Project, which
c was funded by KfW Development Bank, Germany in favour of the
appellant was unsuccessfully assailed before the High Court, a verdict
that was upheld by this Court, as referred to hereinabove.
27. One of the principal limbs of challenge against the eligibility of
the appellant was its lack of experience as a single entity and that it
D having submitted its bid on the strength of the experience of the
subsidiaries of its erstwhile parent/original companies, following the
merger whereof it had come into existence, it was not eligible as per the
qualification norms. It was urged there as well that unless the subsidiaries
are the constituents of a J. V. or a Consortium, their experience cannot
be taken into consideration to gauge the experience of the holding
E company and that as it on a standalone basis, was not possessed of the
requisite experience as prescribed, it ought to have been disqualified on
that count alone.
28. Following an exhaustive analysis of the facts, the relevant
tender conditions as well as the law adumbrated by the pronouncements
F of this Court, this plea against the eligibility of the appellant-corporation
was negated.
29. It would be advantageous, in view of the striking analogy of
the overall perspectives, to recount the relevant observations recorded
therein and having a decisive bearing on the issue under scrutiny.
G
"24. The core issue, as we perceive, pertains to acceptance of
the technical bid of the respondent No. 2 by the 1'' res9ondent
and we are required to address the same solely on the touchstone
of eligibility criteria regard being had to the essential conditions.
The decision on other technical aspects, as we are advised at
H present, is best left to the experts. We do not intend to enter into
M/S CRRC CORPORATION v. METRO LINK EXPRESS FOR I0 I
GANDHINAGAR&AHMEDABADCOMPANY[AMITAVAROY,J.]

the said domain though a feeble attempt has been made on the A
said count.
... ...
,·

26. What is urged before this Court is that the respondent No. 2
could not have been regarded as a single entity and. in any case.
it could not have claimed the experience of its subsidiaries because B
no consortium or joint venture with its subsidiaries was formed.
With regard to relationship of holding and subsidiary companies,
we have been commended to the authorities in Ba/want Rai
Saluja (supra) and also the judgment of the Delhi High Court in
Rohde and Schwarz Gmbh and Co. K.G. (supra). The essential c
submission is that respondent No. 2 as the owner of the subsidiary
companies including their assets and liabilities, cannot claim their
experience and there is necessity to apply the principle of"lifting
th~ corporate veil'', as has been laid down in Renusagar P'Jwer
Co. (supra) and Life Insurance Corporation ofIndia v. Escorts
Ltd. and others'. It is also argued that the Government owned D
entity cannot be treated differently, for a Government owned entity
is distinct from the Government and, for the said purpose, inspiration
has been drawn from the authority in Western Coalfields Limited
v. Special Area Development Authority, Korba and another.
It has also been urged that when the tender has required a E
particular thing to be done, it has to be done in that specific manner,
for the law envisages that where a power is given to do a certain
thing in a certain way, the thing must be done in that way or not at
all. For the aforesaid purpose, inspiration has been drawn from
the authority in Central Coalfields Ltd. (supra) wherein reliance
has been placed on Nazir Ahmad v. King Emperor3. F

27. Before we proceed to deal with the concept of single entity
and the discretion used by the l" respondent, we intend to deal
with role of the Court when the eligibility criteria is required to be
scanned and perceived by the Court. In Montecarlo Ltd. (supra),
the Court referred to TATA Cellular (supra) wherein certain G
principles, namely, the modern trend pointing to judicial restraint
on administrative aCtion; the role of the court is only to review the
1 (I 986) 1 sec 264
sec 125
2 (1982) 1

'AIR 1936 PC 253 H
102 SUPREME COURT REPORTS [2017] 5 S.C.R.

A manner in which the decision has been taken; the lack of expertise
on the part of the court to correct the administratiye decision; the
conferment of freedom of contract on the Government which
recognizes a fair play in the joints as a necessary concomitant for
an administrative body functioning in an administrative S!Jhere or
quasi-administrative sphere, were laid down. It was also stated in
B
the said case that the administrative decision must not only be
tested by the application ofWednesbury principle of reasonableness
but also must be free from arbitrariness not affected by bias or
actuated by mala tides. The two-Judge Bench took note of the
fact that in Jagdish Manda/ (supra) it has been held that, ifthe
c decision relating to award of contract is bona fide and is in public
interest, courts will not, in exercise of power of judicial review,
interfere even if a procedural aberration or error in assessment or
prejudice to a tenderer, is made out. The decisions in Master
Marine Services (P) Ltd. v. Metcalfe & Hodgkinson (P) Ltd.
and another4, B.S.N. Joshi & Sons Ltd. v. Nair Coal Services
D
Ltd. and others5 and Michigan Rubber (India) Ltd. (supra)
have been referred to. The Court quoted a passage from A/cons
Infrastructure Ltd. (supra) wherein the principle that intemretation
placed to appreciate the tender requirements and to interpret the
documents by owner or employer unless mala fide or perverse in
E understanding or appreciation is reflected, the constitutional Courts
should not interfere. It has also been observed in the said case
that it is possible that the owner or employer of a project may give
an interpretation to the tender documents that is not acceptable to
the constitutional Courts but that by itself is not a reason for
interfering with the interpretation given. After referring to the
F said authority, it has been ruled thus:
"24. We respectfully concur with the aforesaid statement of
law. We have reasons to do so. In the present scenario, tenders·
are floated and offers are invited for highly complex technical
subjects. It requires understanding and appreciation of the
G nature of work and the purpose it is going to serve. It is common
knowledge in the competitive commercial field that technical
bids pursuant to the notice inviting tenders are scrutinized by
the technical experts and sometimes third party assistance from
- ------
• (2005) 6 sec 138
H ' (2006) 11 sec 548
MIS CRRC CORPORATION v. METRO LINK EXPRESS FOR 103
GANDHINAGAR&AHMEDABADCOMPANY [AMITAVAROY, J.]

those unconnected with the owner's organization is taken. This A
ensures objectivity. Bidder's expertise and technical capability
and capacity must be assessed by the experts. In the mi.tters
of financial assessment, consultants are appointed. It is because
to check and ascertain that technical ability and the financial
feasibility have sanguinity and are workable and realistic. There
B
is a multi-prong complex approach; highly technical in nature.
The tenders where public largesse is put to auction stand on a
different compartment. Tender with which we are concerned,
is not comparable to any scheme for allotment. This !!rena
which we have referred requires technical expertise.
Parameters applied are different. Its aim is to achieve high c
degree of perfection in execution and adherence to the time
schedule. But, that does not mean. these tenders will escape
scrutiny of judicial review. Exercise of power of judicial review
would be called for ifthe approach is arbitrary or malafide or
procedure adopted is meant to favour one. The decision making D
process should clearly show that the said maladies are kept at
bay. But where a decision is taken that is manifestly in
consonance with the language of the tender document or sub-
serves the purpose for which the tender is floated, the court
should follow the principle of restraint. Technical evaluation or
comparison by the court would be impermissible. The principle E
that is applied to scan and understand an ordinary instrument
relatable to contract in other spheres has to be treated differently
than interpreting and appreciating tender documents relating
to technical works and projects requiring special skills. The
owner should be allowed to carry out the purpose and there
F
has to be allowance of free play in the joints."

29. In Reliance Telecom Ltd. and a11other v. U11io11 of l11dia
and another, the Court referred to the authority in Asia
Foundation & Construction Ltd. v. Trafalgar House
G
Construction (I) Ltd. and others wherein it has been observed
that though the principle ofjudicial review cannot be denied so far
as exercise of contractual powers of Government bodies are
concerned, but it is intended to prevent arbitrariness or favouritism
and it is exercised in the larger public interest or if it is brought to
the notice of the court that in the matter of award of a contract H
104 SUPREME COURT REPORTS [2017] 5 S.C.R.

A power has been exercised for any collateral purpose. Thereafter,
the Court in Reliance Telecom Ltd. (supra) proceeded to state
thus:
"75 .... In the instant case, we are unable to perceive any
arbitrariness or favouritism or exercise of power for any
B collateral purpose in the NIA. In the absence of the same, to
exercise the power of judicial review is not warranted. In the
case at hand, we think, it is a prudent decision once there is
increase ofrevenue and expansion of the range of srrvice."
And again:
c "76. It needs to be stressed that in the matters relating to
complex auction procedure having enormous financial
ramification, interference by the Courts based upon any
perception which is thought to be wise or assumed to be fair
can lead to a situation which is not warrantable and may have
D unforeseen adverse impact. It may have the effect potentiality
of creating a situation of fiscal imbalance. In our view,
interference in such auction should be on the ground of stricter
scrutiny when the decision making process commencing from
NIA till the end smacks of obnoxious arbitrariness or any
extraneous consideration which is perceivable."
E

32. Respondent No. 2, as is evident, is a company owned by the
People's Republic of China and, therefore, it comes within the
ambit of Clause 4.1 of the bid document as a Government owned
entity. We have already reproduced the said clause in earlier part
F
of the judgment. As perceived by the 1fil respondent. a single entity
can bid for itself and it can consist of its constituents which are
wholly owned subsidiaries and they may have experience in relation
to the project. That apart. as is understood by the said respondent,
where the singular or unified entity claims that as a consequence
G of merger, all the subsidiaries form a homogenous pool under its
immediate control in respect of rights, liabilities, assets and
obligations. the integrity of the singular entity as owning such rights,
assets and liabilities cannot be ignored and must be given effect.
While judging the eligibility criteria of the second respondent, the
l fil respondent has scanned Article 164 of the Articles ofAssociation
H
MIS CRRC CORPORATION v. METRO LINK EXPRESS FOR I 05
GANDHINAGAR&AHMEDABADCOMPANY[AMITAVAROY,J.]

of the respondent No. 2 which are submitted along with the bid A
from which it is evincible that the Board of Directors of the
respondent No. 2 has been entrusted with the authority and
responsibility to discharge all necessary and essential decisions
and functions for the subsidiaries as well. According to the I >t
respondent. the term "Government owned entity" would include
B
a government owned entity and its subsidiaries and there can be
no matter of doubt that the identity of the entities as belonging to
the Government when established can be treated as a Government
owned entity and the experience claimed by the parent of the
subsidiaries can be taken into consideration. Learned senior
counsel for the 1fil respondent has drawn our attention to the "lifting c
of corporate veil" principle or doctrine of"piercing the veil" and
in that context. reliance has been placed on Littlewoods Mail
Order Stores, Ltd. v. McGregor6, DHN Food Distributors Ltd.
and others v. London Borough of Tower Hamlets 7 and Harold
Holdsworth & Co. (Wakefield) Ld. v. Caddies8 • Learned senior D
counsel has also placed reliance upon the principles stated in
Renusagar Power Co. (supra) that have been reiterated in New
Horizons Ltd. (supra). In the written submission filed on behalf
of the I" respondent, the relevant paragraphs from Renusagar
Power Co. (supra) have been copiously quoted. It is also urged
that in the current global economic regime the multinational E
comorations conduct their business through their subsidiaries and,
therefore, there cannot be a hyper-technical approach that eligibility
of the principal cannot be taken cognizance of when it speaks of
the experience of the subsidiaries. It is also contended by Mr.
Subramaniam that in the context of fraud or evasion of legal
obligations, the doctrine of "piercing the veil" or "lifting of the
F
corporate veil" can be applied but the said principle cannot be
taken recourse to in a matter of the present nature.
33. With regard to the satisfaction of the I fil respondent, it has
been highlighted before us that the said respondent had thoroughly
examined the bid documents and satisfied itself about of the G
capability, experience and expertise of the respondent No. 2 and
there has been a thorough analysis of the technical qualification
6
(1969) 3 All ER 855
7
(1976)3 All ER462
' (1955) I WLR 352 H
106 SUPREME COURT REPORTS [2017] 5 S.C.R.

A of the respondent No. 2 by the independent General Consultant
and the reports of the Appraisal and Tender Committee of the l"
respondent and also the no-objection has been received from Ktw
Development Bank. Germany which is funding the entire project.
Narrating the experience of the respondent No. 1, it has been
stated in the written submission filed on behalf of the l ''respondent:
B
"36. That it is further clear from the record that besides being
the lowest bidder, the experience of R 2 in supplying Metro
Trains across the world exceeds the Petitioner's experience
by a huge margin. Where for clause 12, R 2 has shown a
figure of 594 Metro Cars, Petitioner has shown only 72 Cars;
c and for clause 12.1 where R 2 has shown 432 Cars, Petitioner
has again shown only 72 Cars. This vast experience of R 2
would be beneficial for the project and would further public
interest.
37. That R 1 without any malice, or malafide has treated R 2
D along with its I 00% subsidiaries as one entity. This
understanding of the clause has been at the ends ofboth parties
viz. R 1 and R 2, who were ad idem vis-a-vis the eligibility of
the parent company io bid using the experience and executing
the contract through its various 100% wholly owned
E subsidiaries.
38. That the above understanding ofR I of treating R 2 along
with its 100% subsidiaries is supported by the understanding
of the Delhi Metro Rail Corporation Ltd., which has on a
similarly, if not same, worded bid-document granted the tender/
F agreement to R 2, which had even there bid as a parent
company claiming experience of and execution through 100%
wholly owned subsidiaries.
39. That moreover, there is no bar, whatsoever, express or
implied, in the tender document to treat the parent company
G along with its I 00% wholly owned subsidiaries as one entity.
Therefore, the scope of judicial review should be limited in
adjudging the decision taken by RI in the best interest of the
project, and thereby, the public.
40. That arguendo, no prejudice, whatsoever, has been caused
to the project or to other bidders including the Petitioner by the
H
MIS CRRC CORPORATION v. METRO LINK EXPRESS FOR l 07
GANDHINAGAR&AHMEDABADCOMPANY[AMITAVAROY,J.]

above understanding of the tender conditions by R 1. It is A
humbly submitted that R 2 fulfilled all the technical requirements.
The bid-document itself provided for bidding as a consortium,
and did not require in such a case fulfilment of any material
condition, which ifnot fulfilled would prejudice any parties or
the project. Moreover, the scheme of the bid-document is such B
that it itself provides for a Parent Company Guarantee.
According to this Parent Company Guarantee Form, a parent
company would have to perform the works under the agreement
in case the subsidiary failed. Therefore, the objections raised
by the Petitioner are hyper-technical and have been raised
only to stall the project once it was found to be unsuccessful." ·C
34. As is noticeable. there is material on record that the respondent
No. 2, a Government company. is the owner of the subsidiaries
companies and subsidiaries companies have experience. The l ''
respondent, as it appears, has applied its commercial wisdom in
the understanding and interpretation which has been given the D
concurrence by the concerned Committee and the financing bank.
We are disposed to think that the concept of"Govemment owned
entity" cannot be conferred a narrow construction. It would include
its subsidiaries subject to the satisfaction of the owner. There
need not be a formation of a joint venture or a consortium. In the
obtaining fact situation, the interpretation placed by the l '' E
respondent in the absence of any kind of perversity, bias or mala
fide should not be interfered with in exercise of power ofjudicial
review. Decision taken by the 1''respondent, as is perceptible, is
keeping in view the commercial wisdom and the expertise and it
is no way against the public interest. Therefore, we concur with F
the view expressed by the High Court."
30. Be that as it may, it would notwithstanding the above, be
indispensable to examine and decipher the import of the relevant clauses
pertinent to the question to be addressed. Clause 4.1 of Section 1 of the
Instructions to Bidders which defines "eligible bidders" is in following G
terms:
"Eligible Bidders:-
4.1. A Bidder may be a firm that is a single entity or any
combination of such entities in the form of a joint venture (JV)
under an existing agreement or with the intent to enter into such H
108 SUPREME COURT REPORTS [2017] 5 S.C.R.

A an agreement supported by a letter of intent. In the case of a JV:
Consortium formation is acceptable.
Tender condition Prevails.
(a) All members shall be jointly and severally liable for the
B execution of the Contract in accordance with the Contract
terms, and
(b) The JV shall nominate a Representative who shall have the
authority to conduct all business for and on behalf of any and
all the members of the JV during the bidding process and, in
C the event the N is awarded the Contract during Contract
execution."
31. A relevant extract of Clause 7 .1 of the same Section, which
provides for clarification ofbidding documents, site visit pre-bid meeting,
is furnished hereinbelow:
D "A Bidder requiring any clarification of the Bidding Documents
shall contact the Employer is writing at the Employer's address
specified in the BDS or raise his enquiries during the pre-bid
meeting if provided for in accordance with ITB.7.4."
32. Clauses 2.4.1 and 2.4.2 (a) & (b} of the "Evaluation and
E Qualification of Criteria'', Section III are also extracted as hereunder:
"General Experience (Clause 2.4.1)
Experience in the role of prime contractor (single entity or N
member), Subcontractor or management contractor for at least
last ten (I 0) years starting I" January, 2006.
F
Specific Experience Clause 2.4.2(a)
A minimum number of two (2) similar contracts that have been
satisfactorily and substantially completed as a prime contractor
(single entity or JV member) between l '' January, 2006 and the
G Bid submission deadline.
Specific Experience (2.4.2(b)
Experience under contracts in the role of prime contractor (single
entity or N member) for Vehicle Design, Interface (with other
designated Contractors such as signaling, Track Traction, etc.),
H
MIS CRRC CORPORATION v. METRO LINK EXPRESS FOR 109
GANDHINAGAR&AHMEDABADCOMPANY[AMITAVAROY,J.]

Assembly & Supply, Testing and Commissioning of minimum of A
total 150 metro (i.e. MRT, LRT, Sub-urban Railways or high speed
railways) cars made of either Stainless Steel or Aluminum with
similar features including three phase tr~ction propulsion system
ATP/ ATO systems, etc. between I" January, 2006 and the Bid
submission deadline.
B
AND
Out of 150 or more cars supplied and commissioned as above
have minimum of total 75 metro (i.e. MRT, LRT, Sub-urban
Railways or high speed railways) cars supplied and in satisfactory
revenue operation continuously for at least five years: c
EITHER in at least 1 (one) country outside the country of origin
OR in India."
33. It isamatterofrecord thatbetween 16.03.2016 and 30.04.2016,
in course of the pre-bid meetings with the bidders, certain queries were
raised by them to which clarifications had been furnished by MEGA. D
The following queries and clarifications as available from the records
being pre-eminently relevant are quoted hereinbelow:

Query raised Clarification issued
E
Serial No. 50: Existing The subsidiary comnany./groun
requirement that the consortium comnany may bid together wi.th
members experience shall only the narent company l!L.J!
be counted for qualification JVI consortium member, for
narents/ groun com12an:i:
Kindly allow Parent F
ex11erience to be taken in to
companies/Grou11 companies account.
experience to be taken into
account for meeting the
gualification reguirement as this
will simplify the Contract Tender Condition prevails. G
structure. The same has been
allowed in several large tenders
in India recently.

H
110 SUPREME COURT REPORTS [2017] 5 S.C.R.

A
Serial No.52: Kindly accept Each member of JV/Consortium
letter of credit facility issued is a separate entity with a distinct
by the bank in favor of role assigned as per MOU and,
N/Consortium or companies therefore, the requirement are
belong to same global group specified
B
of companies rather than
individual cap in case the Tender Condition prevails.
applicant is N/Consortium.

Serial No. 54. For a proper The subsidian: com12any/groug
c local management, we suggest com12any may bid together with
you to kindly allow a fully the 12arent comgany as a
owned Indian subsidiary can JVI consortium member, for
use the date and references of Parents/group company
the parent company and experience to be taken in to
D participate m tender on/its account. Each member must
own and or as consortium meet the requirement.
with parent company
borrowing the technical &
financial credentials or the
E parent company

Serial No. 56: For a proper The subsidian: com12any/grou12
local management, we suggest com12any may bid together with
you to kindly allow a fully the 12arent com12any as a
owned/Indian subsidiary can JV/conso1tium member, for
F.
part of consortiuin/JV with Parents/group company
their parents company, even experience to be taken in to
100% subsidiary doesn't have account.
10 years experience and
G
doesn't meet other_eligibility
conditions mentioned m
Clause No.2 of Section-Ill of
Evaluation and Qualification
Criteria.
H
MIS CRRC CORPORATION v. METRO LINK EXPRESS FOR 111
GANDHINAGAR&AHMEDABADCOMPANY[AMITAVAROY,J.]
.,.

34.'A plain reading of clause 4.1 reveals that a bidder can be a A
single entity or a combination of such entities in the form ofa J.V. or a
Consortium under an existing agreement or with the intent to enter into
such an agreement supported by a letter of intent. Thus a single entity
has been construed to be a valid bidder for all intents and purposes.
35. Having regard to the magnitude of the project as well as the B
experience and expertise essential for the quality execution thereof,
there seems to be no justification to infer, at the first place, to exclude a
government owned entity with its 100% wholly owned subsidiaries to be
ineligible to participate in the process. A single entity, in our
comprehension, would assuredly include such a government owned entity
along with its 100% wholly owned subsidiaries. This is more so on the C
touchstone of otherwise imperative facilitation of a broad based
participation of entities with competing worth and capabilities, in the
overall interest of the timely and quality execution ofa public project.
36. As recorded in Consortium of Titagarh Firema Adler SPA
rs
(supra), the appellant-corporation a government owned entity with D
100% wholly owned subsidiaries as a composite unit, so much so that
the experience of any one of its constituent 100% wholly owned
subsidiaries would be construable as its experience. It was proclaimed
that the petitioner (respondent no.2 therein) was a Government Company
and the owner of its subsidiary companies and that the concept of E
"government own entity" could not be given a narrow construction so as
to exclude its subsidiaries with their experience and that there was no
necessity for the formation of a joint venture and consortium for the
Government own entity to avail the benefit of the experience of its
subsidiary companies. That the acceptance of the petitioner (respondent
no.2) therein in the context of the work awarded to it was in accord with F
public interest, having regard to the overall commercial concept and the
demand of expertise, was underlined as well. Noticeably, the process of
merger of Mis. CNR Corporation and Mis. CSR Corporation and the
integration thereof along with their subsidiaries to metamorphosise into
the appellant-corporation is borne out by the coeval records. G
37. In that view of the matter, the status and the entitlements of
the appellant-corporation, as already adjudicated in Consortium of
Titagarh Firema Adler SPA (supra), as a single entity bidder in the
present tender process would also by the yardstick of simple logic and
analogy be available to it. Absence of the words "government owned H
112 SUPREME COURT REPORTS [2017) 5 S.C.R.

A entity" in clause 4.1, presently under consideration, is of no consequence.
The plea of the respondent that the tender conditions involved demand a
different perspective in the overall conceptual framework thereof, lacks
persuasion. Significantly, in clause 4.1 involved in Consortium of
Titagarh Firema Adler SPA (supra), "government owned entity" had
been contemplated as one of the bidders in contradistinction to "private
B
entity" and "any combination of such entities" in the form of a joint
venture (J.V) ..... The expression used in the present clause being "single
entity'', understandably, it is inclusive ofa private as well as a government
owned entity. The unit envisaged as a single entity is thus independent
of any combination or formation in the form ofa J.V. or a Consortium
c and thus is visualised to be one integral and composite whole. In such
a logical premise, a government owned company with its I 00% wholly
owned subsidiaries has to be comprehended as a single entity, eligible to
bid in terms of clause 4.1 of the tender conditions and is to be regatded
as single, coherent and homogeneous existence and not a disjointed
formation.
D
38. The queries and the clarifications, relatable to the discord, as
presented, also in our discernment, do not substantiate the plea of MEGA
in any manner whatsoever. The foundation of rejection of the appellant's
bid is the clarification to the query mainly at serial No. 50. It is patent
therefrom that it was in response to a query made by a subsidiary company
E to allow for its benefit, the experience of the parent company/group
companies to meet the qualification requirement with regard thereto. It
was in that context that the clarification furnished was that the subsidiary
company/group companies may bid together with the parent company
as J.V./Consortium member, for parent/group company's experience to
F be taken into account. This clarification was extended and applied vis-
a-vis the appellant qua clauses Nos. 2.4. l, 2.4.2(a), 2.4.2(b) and 2.4.2.(c)
to disqualify it on the ground that on stand alone basis, it was deficient in
the experience prescribed and that it could not have availed of the
experience of its subsidiary companies. As rightly contended on behalf
of the appellant, we are of the view that this clarification has no
G application to its case and, therefore, the decision to disqualify it on this
ground is apparently arbitrary, discriminatory, unreasonable, illogical and
non-transparent, thus rendering the same irreversibly illegal, unjust and
unfair. The improvement endeavoured by the respondent in its reply
affidavit is belied by the records and is unacceptable. No other view or
H
MIS CRRC CORPORATION v. METRO LINK EXPRESS FOR 113
GANDHINAGAR&AHMEDABADCOMPANY[AMITAVAROY,J.]

elucidation of the relevant clauses of the tender conditions is at all possible. A
The interpretation offered by the respondent and endorsed by the High
Court in the contextual framework is thus patently impermissible and
absurd.
39. Not only the appellant as the record testifies had offered its
responses to the clarifications sought for, its status as a government B
owned corporation, by no means, has been disputed by MEGA. Further,
in the face of its demonstrated structural integrity and functional unity
qua its subsidiaries with all consequential legal implications, the
apprehension of MEGA that the subsidiary companies of the appeilant,
if necessity so arises, would not be available for the execution of the
project, not being a party to the contract, to say the least, is speculative, c
unfounded, farfetched and wanting in reason and rationale. Whether
the subsidiary companies of the appellant would be responsible for the
execution of the work is evinced by the formational specifics and
functional dynamics of the appellant and its wholly owned subsidiary
companies, as noticed in Consortium of Titagarh Firema Adler SPA D
(supra) in the affirmative and does not call for further dilation. In the
face of a forensic analysis of the decisions cited at the Bar in the above
adjudication, it is inessential as well to retraverse the same.
40. In the wake of the above determination, the impugned
disqualification of the appellant on the ground of deficiency, in experience E
in terms of clause 2.4, is unsustainable in law and on facts being grossly
illegal, arbitrary and perverse. As a corollary, the judgment and order of
the Higb, Court in challenge is also set-aside. The tender process in
view of the above conclusion, would be furthered hereinafter as per the
terms and conditions thereof and in accordance with law and taken to its
logical end as expeditiously as possible. We make it clear that the F
present adjudication is confined only to the issue of disqualification of
the appellant on the ground of experience on the touchstone of clause
2.4 of the "Eligibility and Qualification Criteria" of"Tender Document"
and no other aspect. The appeal is allowed. In the facts and circumstances
of the case, there shall be no order as to costs. G

Kalpana K. Tripathy Appeal allowed.