Nafr High Court
Case Details
1 2025:CGHC:45155-DB NAFR HIGH COURT OF CHHATTISGARH AT BILASPUR WPC No. 4701 of 2025 Jinchandra Enterprises Through- Its Proprietor Pradeep Pincha Jain, Aged About 61 Years, S/o Late Tikamchand Ji Pincha, Address 102, Balaji Apartment, Ward No. 43, Padmanabhpur, Durg, District- Durg (C.G.). ... Petitioner(s) versus 1. State of Chhattisgarh Through- Secretary School Education, Department Mantralaya Mahanadi Bhawan, Atal Nagar, Raipur, District- Raipur, (C.G.). 2. Director Through- Director of Public Instructions, DPI School Education, Department Indrawati Bhawan, Naya Raipur, District- Raipur, (C.G.). 3. Deputy Director Directorate Of Public Instruction School Education, Department Mantralaya Raipur, Raipur, District- Raipur, (C.G.). 4. Union Of India Through- Secretary Ministry Of Micro Small And Medium Enterprises, 7th Floor Nirman Bhawan, Maulana Azad Road New Delhi 110108 5. Union Of India Through- Secretary Ministry Of Finance Procurement Policy Division Department Of Expenditure, North Block, New Delhi-110001 6. Government E Market Place ( Gem Portal ) Through- Its Chief Executive Officer, 3rd Floor, Tower 2, Jeevan Bharti Building, Connught Place New Delhi 110001 ...Respondent(s) BRIJMOHAN MORLE Digitally signed by BRIJMOHAN MORLE Date: 2025.09.04 18:35:52 +0530 2 For Petitioner For Respondent/State For UOI : : :
Legal Reasoning
Mr. Sushobhit Singh, Advocate. Mr. Prafull N. Bharat, Advocate General, assisted by Mr. Shashank Thakur, Deputy Advocate General. Mr. Ramakant Mishra, Deputy Solicitor General along with Ms. Anmol Sharma, Advocate. Hon'ble Shri Ramesh Sinha, Chief Justice Hon'ble Shri Bibhu Datta Guru , Judge Per Ramesh Sinha , Chief Justice
Decision
Order on Board 04.09.2025 1. Heard Mr. Sushobhit Singh, learned counsel for the petitioner. Also heard Mr. Prafull N. Bharat, learned Advocate General, assisted by Mr. Shashank Thakur, learned Deputy Advocate General, appearing for the State and Mr. Ramakant Mishra, learned Deputy Solicitor General, appearing for Union of India along with Ms. Anmol Sharma, learned counsel. 2. The present writ petition has been filed by the petitioner with the following prayers: “10.1 That, this Hon’ble Court may kindly be pleased to call for the entire records of the case. 10.2 That, this Hon’ble Court may kindly be pleased to issue appropriate writ, order, direction and quash/set aside and issue suitable direction for the modification 3 of the impugned tender notice (Annexure P/1) passed by respondent No. 2 and the respondents may be directed to incorporate suitable changes for making provisions of atleast 25% procurement from MSME Units and the petitioner may be allowed to participate in the bidding process. 10.3 That, the petitioner further prays that a suitable writ, order or direction may be issued to the respondents to exempt the petitioner MSME Unit from the compliance of the minimum turnover requirement and the respondents may be further directed to allow the petitioner MSME Unit to participate in the bid without insisting upon the minimum turnover requirement as per the impugned tender notice Annexure P/1. 10.4 That, the respondent State authorities to incorporate the provisions of the Procurement Order 2012 in the impugned tender notice Annexure P/1 and the tender process shall be finalized by complying with the provisions of Purchase Order 2012. 10.5 That, the petitioner MSME unit further prays that this Hon’ble Court may issue suitable direction to the respondents to grant exemption from the deposit of EMD amount of Rs. 93,00,000/-. 4 10.6 Any other relief/reliefs which may deem fit and proper in the facts and circumstances of the case may also be allowed.” 3. Learned counsel for the petitioner submits that the petitioner is a citizen of India, duly registered as an MSME enterprise, engaged in the manufacture of metal household articles and allied products, and registered under the GST Act. It is contended that the petitioner possesses adequate means and resources to supply goods of the highest quality as per the tender requirements. 4. It is further contended by the learned counsel for the petitioner that the impugned tender violates the mandatory provisions of the Public Procurement Policy for Micro and Small Enterprises (MSEs) Order, 2012, which mandates that at least 20% of the total annual procurement by Government Departments be made from MSMEs. No such reservation or preference has been made in the tender, thereby frustrating the object of the MSME Act, 2006. 5. Learned counsel for the petitioner would submit that the turnover requirement of Rs. 936 lakhs over the preceding three financial years is highly arbitrary, unreasonable, and discriminatory as it excludes genuine small MSME units from participating. It is further argued that the requirement of deposit of an Earnest Money Deposit (EMD) of Rs.93,00,000/- without granting the statutory exemption to MSMEs is in violation of the Government’s own notifications. Reliance is placed on Life Care Innovations v. Union of India, reported in (2016) 3 SCC 5 287, to contend that the Public Procurement Policy has the force of law and is binding upon the State authorities. 6. Per contra, learned Advocate General submits that the tender process has been conducted strictly in accordance with the applicable procurement rules and guidelines. It is contended that no statutory right of the petitioner stands infringed by the issuance of the impugned tender. It is submitted that the minimum average annual turnover has been prescribed to ensure that only financially sound and capable bidders are entrusted with the execution of large-scale supply contracts which directly impact public interest, namely, the implementation of the PM Poshan (Mid-Day Meal) Scheme. Such conditions are within the exclusive domain of the tendering authority and cannot be said to be arbitrary or discriminatory. Reliance is placed on Tata Cellular v. Union of India, reported in (1994) 6 SCC 651, wherein it was held that judicial review in tender matters is confined to examining the decision-making process and does not permit the Court to substitute its own view. 7. It is further contended that the Public Procurement Policy for MSEs Order, 2012, while having statutory force, does not confer any enforceable individual right to insist on procurement in favor of a particular MSME. It only imposes a general obligation on Government departments to endeavor to achieve 20% procurement from MSMEs on an annual basis. Reliance is placed on Michigan Rubber (India) Ltd. v. State of Karnataka, reported in (2012) 8 SCC 216, to submit that the terms of a tender are not open to judicial scrutiny unless they are shown to be arbitrary, discriminatory, mala fide, or actuated by bias. 6 8. We have carefully considered the rival submissions and perused the material on record. 9. Clause 3 of the Public Procurement Policy for MSEs Order, 2012, undoubtedly provides that a minimum of 20% of annual procurement shall be from MSMEs. However, as rightly pointed out by the learned Advocate General, this is a general directive and does not create an enforceable right for an individual MSME to claim reservation or preference in a particular tender. 10. The Hon’ble Supreme Court in Life Care Innovations (supra) has clarified that the Court’s jurisdiction in such matters is limited to ensuring the proper constitution and functioning of the statutory authorities and committees under the Act and the Policy, and that the policy-making function is to be left to the executive. No material has been placed before us to show that the State has failed to meet its general procurement target for MSMEs for the relevant financial year. 11. Further, prescribing eligibility conditions such as turnover is well within the discretion of the tendering authority. The turnover criterion is intended to ensure that the successful bidder has the financial capacity to fulfill the contractual obligations of a project of this magnitude. 12. In Silppi Constructions Contractors v. Union of India, reported in (2020) 16 SCC 489, the Hon’ble Supreme Court reiterated that the Government must have a free hand in setting the terms of the tender and interference is warranted only where the decision is arbitrary, mala 7 fide, irrational, or in violation of statutory provisions. We find no such arbitrariness or illegality in the present case. The condition is uniformly applicable to all bidders and has a rational nexus with the objective sought to be achieved. Similarly, exemption from EMD is not an absolute right, but a concession which the tendering authority may grant considering the nature of procurement. In Agmatel India Pvt. Ltd. v. Resoursys Telecom, reported in (2022) 5 SCC 362, it was held that such conditions cannot ordinarily be interfered with unless shown to be manifestly arbitrary. The petitioner has not demonstrated any such arbitrariness. 13. In view of the above discussion, we are of the considered view that no case for interference under Article 226 of the Constitution is made out. The impugned tender conditions do not suffer from illegality, arbitrariness, or violation of the Public Procurement Policy for MSEs Order, 2012. 14. Accordingly, the writ petition stands dismissed. Sd/- Sd/- (Bibhu Datta Guru) (Ramesh Sinha) Chief Justice Judge Brijmohan