Nafr High Court
Case Details
1 2025:CGHC:11258-DB NAFR HIGH COURT OF CHHATTISGARH AT BILASPUR WPC No. 6389 of 2024 1 - M/s Sarwa Mangala Food Industries Pvt. Ltd. Through Its Managing Director Gyan Prakash Lath S/o Late Arun Kumar Lath Aged About 41 Years, Having Its Registered OfÏce At Shop No. 17, Inside Bus Stand, Bilaspur, Chhattisgarh. 2 - M/s Ma Kanta Pure FRK, Through Its Proprietor Shri Nitin Agrawal S/o Deepchand Agrawal, Aged About 38 Years Having Its Registered OfÏce At Village Sendhri, Tahsil Bhatapara, 493118. 3 - M/s Shreya Traders, Through Its Proprietor Manju Agrawal, W/o Yogesh Kumar Agrawal, Aged About 40 Years, Having Its Registered OfÏce At Bichhli Tola, Dongargarh, District Rajnandgaon, Chhattisgarh. 4 - M/s Jagat Agro, Through Its Partner, Madhusudan Agrawal, S/o Suresh Kumar Agrawal, Aged About 32 Years Having Its Registered OfÏce At Mega Food Park, Sector 2, Village Bagaud, Kurud, Dhamtari, Chhattisgarh. 5 - (Deleted ) M/s Namo Overseas, As Per Hon'ble Court Order Dated 20.02.2025 6 - M/s Banke Bihari Rice Mills (Deleted) As Per Hon'ble Court Order Dated 04.03.2025 7 - (Deleted) M/s SK Global, As Per Hon'ble Court Order Dated 20.02.2025 2 8 - M/s Jai Shri Balaji Agrotech, Through Its Partner Ravi Agrawal, S/o Shri Ram Kishore Agrawal, Aged About 39 Years, Having Its Registered OfÏce At Village Mohtarai, District Bilaspur, Chhattisgarh. 9 - M/s Sunita Agrotech, Through Its Proprietor Nikhil Agrawal, S/o Ravindra Kumar Agrawal, Aged About 30 Years, Having Its Registered OfÏce At Parsada 5, Nawapara, Rajim, District Raipur, Chhattisgarh. 10 - M/s SS Industries, Through Its Proprietor Sunita Mukim W/o Shri Vijay Mukim Aged About 56 Years, Having Its Registered OfÏce At Plot No. 37, 38, And 47, 48 Sector 1, Industrial Area, Megha Food Park, Village Bagaud, Tehsil Kurud, District Dhamtari, Chhattisgarh. ‘11 - M/s Anant Rice Industries (Deleted) As Per Hon'ble Court Order Dated 04.03.2025 12 - (Deleted ) M/s Siddhi Vinayak Industries, As Per Hon'ble Court Order Dated 20.02.2025 13 - M/s Vikas Agro Products, Through Its Partner Vivek Agrawal, S/o Madan Gopal Agrawal, Aged About 42 Years, Having Its Registered OfÏce At Plot No. B 16, Industrial Area, Silpahari District Bilaspur, Chhattisgarh. 14 - M/s Hariom Rice Industries, Through Its Proprietor Pooja Gandhi, D/o Jagdish Tapadiya, Aged About 37 Years, Having Its Registered OfÏce At B4, R Logistics Park, Guma, Riapur, Chhattisgarh. 15 - M/s Shri Shiv Foods, Through Its Partner Smeer Singhal, S/o Suresh Kumar Agrawal, Aged About 48 Years, Having Its Registered OfÏce At Otenband, District Balod, Chhattisgarh. 16 - M/s Earthika Agro, Through Its Partner Vijay Kumar Agrawal, S/o Gangadhar Agrawal Aged About 43 Years, Having Its Registered OfÏce At 629/3, Behind Warehouse, Rajim Road, Mongra, District Mahasamund, Chhattisgarh. 3 17 - Devcon Foods Pvt. Limited, Through Its Proprietor Deepak Goyal, S/o Om Prakash Goyal, Aged About 40 Years, Having Its Registered OfÏce At Plot No. 68 To 76, Food Park Sector-1, Bagaud 493663, Tahsil Kurud, District Dhamtari, Chhattisgarh. 18 - Banke Bihari Industries, Through Its Partner Dhiraj Agrawal, S/o Santosh Agrawal, Aged About 39 Years Having Its Registered OfÏce At Putpura, District Janjgir - Champa, Chhattisgarh. ... Petitioner(s) versus 1 - State of Chhattisgarh Through Its Secretary Department of Food And Public Distribution, Mahanadi Bhawan, Naya Raipur, District Raipur, Chhattisgarh. 2 - Chhattisgarh State Sahkari Vipanan Sangh Maryadit, Government of Chhattisgarh (MARKFED), Through Its Managing Director, 6th Floor, Tower 'C' Commercial Complex, CBD, Sector-21, Block C, Atal Nagar, Naya Raipur, District Raipur, Chhattisgarh. 3 - NCDEX-e Markets Limited (NeML), Unit No. 101 And 101 T, First Floor, Akruti Corporate Park, L.B.S. Marg, Next To GE Garden, Kanjurmarg (West), Mumbai- Maharashtra. For Petitioner(s) : Mr. Abhishek Sinha, Senior Advocate assisted by ... Respondent(s) Ms. Khushboo Naresh Dua, Advocate. For Respondent No. 1 / : Mr. Sangharsh Pandey, Government Advocate. State For Respondent No. 2 / : Mr. Prafull N Bharat, Senior Advocate assisted by MARKFED Mr. Harshal Chouhan, Advocate. For Respondent No. 3 / : Mr. Chandradeep Prasad, Advocate. NCDEX-e 4 Hon’ble Mr. Ramesh Sinha, Chief Justice Hon’ble Mr. Ravindra Kumar Agrawal, Judge Per Ramesh Sinha, Chief Justice Order on Board 04/03/2025
Legal Reasoning
1. Heard Mr. Abhishek Sinha, learned Senior Advocate assisted by Ms. Khusboo Naresh Dua, learned counsel for the petitioner. Also heard Mr. Sangharsh Pandey, learned Government Advocate for the State/respondent No. 1, Mr. Prafull N Bharat, learned Senior Advocate assisted by Mr. Harshal Chouhan, learned counsel for the respondent No. 2 as well as Mr. Chandradeep Prasad, learned counsel for the respondent No. 3. 2. By this petition under Article 226 of the Constitution of India, the petitioners have prayed for the following relief(s): “10.1 The, Hon'ble Court may be pleased to quash the Request for Proposal dated 28.11.2024 issued by Respondent No. 2 which is annexed as Annexure P/1 for being in contravention with Chhattisgarh State Store Purchase Rules, 2002 or in alternate; 10.2 The Hon'ble Court may be pleased to quash clause 1.3, 2.6, 2.7, 3.20 and 6.6 of the Request For Proposal as they are unreasonable, discriminatory, unjust and against the provision of Chhattisgarh State Store Purchase Rules, 2002. 10.3 The, Hon'ble Court may be pleased to issue a direction to Respondent No. 2 to cancel the Request for Proposal dated 28.11.2024 issued by Respondent No. 2 which is annexed as Annexure P/1 and direct Respondent No. 2 for issuance of fresh tender in accordance with Chhattisgarh State Store Purchase Rules, 2002 which govern the field for procurement. 10.4 The Hon'ble Court may also be pleased to order payment of costs to the Petitioner. 5 10.5 The Hon'ble Court may further be pleased to pass any other order in favour of the Petitioner as it may deems fit and proper under the facts and circumstances of the case.” 3. The facts, in brief, as projected by the petitioners in this petition is that petitioners are Micro and Small Enterprises (for short, the MSEs), registered in the State of Chhattisgarh under the provisions of Micro, Small and Medium Enterprises Development Act, 2006 (for short, the Act of 2006) and are manufacturers of Fortified Rice Kernels (FRKs). The petitioners in the instant writ petition are challenging the legality and validity of certain condition mentioned in Tender/ Request for Proposal (for short, the RFP) dated 28.11.2024 issued by respondent No. 2 inviting on-line application from FRK manufacturers from all over India for the supply of 84,000 MT FRKs as per FSSAI Standards through participation in the reverse e-auction conducted through respondent No. 3-NCDEX e-Markets Limited (NeML) Portal on behalf of Chhattisgarh State Marketing Federation (MARKFED) with three (3) Micro Nutrients (Iron, Folic Acid and Vitamin B12) in 20 KG bags for Kharif 2024-25 to the Rice Millers of Chhattisgarh for the fortification of custom milled rice to be delivered at the supply point to the respective group because of which FRK manufacturers situated in the State of Chhattisgarh which are not in conformity with the Chhattisgarh Bhandar Kraya Niyam, 2002 (for short, the Rules of 2002). 4. The fortified rice is produced by blending fortified rice kernels with regular blending rice through use of various blending solution in the ratio of 1:100 for further distribution / usage by Government Agencies/Organization under various schemes of Central and State Government. The fortification of rice consists of 3 major steps: (i) Conversion of Rice to flour, (ii) Blending of rice flour and Vitamin-minerals Premixes and (iii) Exclusion of mixture in shape of rice to form pallets of blended fortified rice flour having the same composition of rice with addition of Vitamin 6 and Minerals premixes. The Fortified Rice are then supplied to Government empaneled Rice Mills located in State and mixed with millets/rice and supplied to Government for various schemes. FRK produced by the manufacturing Units are majorly supplied to Government for various schemes and there are no other avenues available to the manufacturers other than supplying to Government. Since 2019, the FRK was directly supplied to Rice Mills in State through free sale by manufacturers and there has been no direct procurement of FRK by State of Chhattisgarh. Further, there has never been any restriction whatsoever as to turnover/experience, as it was a free sale market and the only criteria was quality check by NABL certified labs. 5. This year i.e. 2024, the authorities have decided to select manufacturers of FRK to supply the FRK to the rice mill owners through the process of auction and allot the quantities to be supplied by them to the rice mill owners in the areas specified. In furtherance of the same, respondent No. 2 has floated an RFP dated 28.11.2024 inviting eligible FRK manufacturers from all over India to participate as per eligibility criteria through price discovery in reverse e-auction process to be conducted by Respondent No. 3 i.e., NCDEX e-Markets Limited (NeML). The order quantity as per the tender is 84,000 MT and the contract period was KMS 24-25. The start date for downloading the bid document was 30.11.2024 and a pre-bid meeting was on held on 06.12.2024. As per the RFP the last date and time for receipt of technical documents was 24.12.2024 and reverse e-auction date was 30.12.2024. In the pre-bid meeting held on 06.12.2024, the petitioners and other prospective bidders raised objections and submitted a letter requesting for amendment of the conditions of RFP by which they were aggrieved including the clauses/conditions which are challenged in the present Writ Petition. However, the objections of the bidders except one objection was rejected and dismissed by respondent No. 2. 6. Mr. Abhishek Sinha, learned Senior Advocate appearing for the 7 petitioners submit that the State has framed Rules of 2002 with an objective to promote local small enterprises in the procurements of the State. As per Rule 2.1 of said Rules, the provisions of Rules shall be applicable to all public enterprise of State of Chhattisgarh and the public enterprises are bound to comply with the provisions of the Rules of 2002 in their procurement process. Further, as per Rule 13(4) of the Rules of 2002, provide for provisions for compulsory and preferential purchase from the micro and small enterprises which are located in the state of Chhattisgarh. Respondent No. 2 being public enterprise under the control of the State, and therefore is bound by the Rules of 2002, which is a State Policy and is enforceable by law. As per Rule 13(3) and 13(4) of the Rules of 2002, priority benefits must be given to the local manufacturers while purchasing goods from MSE or Industries set up in the State. The condition laid down in RFP is not in conformity with the Rules of 2002, and with benefits given to MSEs, the petitioners herein are aggrieved by certain clauses and conditions as mentioned in the RFP. 7. According to Mr. Sinha, clause 1.3 of the states that "The Applicants all over India capable of supplying Fortified Rice Kernals (FRK) in 20 KG bags are invited to participate in the reverse e-auction conducted through NCDEC-e-Markets Limited (NeML) for which registration is mandatory”. The instant tender is open for applicants all over India and no preference has been given to MSEs established in State which is directly in contravention to the provisions of Rules of 2002 which provides for mandatory preference to the MSEs of the State. The auction held in other States like Punjab, Jammu, Kerala, Jharkhand and Andhra Pradesh have given preference to the local Micro and Small manufacturers of FRK established in their respective NITs/RFPs, even in tenders which were open for bidders outside the State. The other 8 eligibility/conditions the petitioners herein are aggrieved is that clause 2.6 of the RFP states that the bidder must have supplied a minimum quantity of as per Annexure II to any State Government, Central Government, Public Sector Undertaking only during immediate past three years from the date of issuance of RFP. This clause, according to the petitioners, is particularly discriminatory towards the bidders who are situated in the State of Chhattisgarh and were supplying FRK. In past, the procurement of FRK in the State of Chhattisgarh was done through free sale of FRK i.e., the manufacturers were supplying FRK to the rice mill owners directly. The FRK have not been procured by the Government of Chhattisgarh or any public sector undertaking situated in the State of Chhattisgarh. The manufacturers of FRK which are situated in the State and have been supplying FRK within the state of Chhattisgarh, cannot have an experience of supplying FRK to State Government, Central Government, PSUs and this clause is discriminatory towards the bidders of Chhattisgarh as it has effectively debarred or made them ineligible for participation in the RFP. Respondent No. 2 by compelling the bidders to have an experience of 3 years has been specifically incorporated to impliedly give undue benefit to the bidders situated outside Chhattisgarh as it is well aware that until 2023, the FRK were procured from local manufacturers on free sale basis and there was no experience certificate was provided to these local manufacturers. Further, clause 2.7 of the RFP states that there would not be any relaxation in the FRK manufacturing capacity MT per day basis however, to ensure healthy participation, MARKFED will allow relaxation in the average annual turn over and FRK supply experience for the newly established Plants. In case if any applicant does not have required FRK supplies experience and average annual turnover as mentioned in clause 2.6, can also participate provided the applicant will have to furnish additional 3% Security Deposit (for short, the SD) over and above stipulated EMD and 9 SD. As per clause 7.1 of RFP, a prospective bidder has to deposit an amount equivalent to 3.28% on the trade value and as per clause 8.1 of RFP, a successful bidder has to deposit an amount equivalent to 10% of the value of order. Hence, a successful bidder is required to incur substantial costs to secure the RFP in its favor. Such costs are substantial for a micro and small enterprise and imposition of additional 2% amount as stipulated under Clause 2.7 of RFP will effectively debar and deter all the MSEs from participating in the tender process which is against the objectives of Act of 2006 and Rules of 2002. As per the calculation of EMD and SD that needs to be deposited after claiming relaxation as to experience is ranging between EMD- Rs. 22,88,625 to Rs. 1,94,51,070 and SD Rs. 92,66,141 to Rs. 7,87,53,112. The petitioners come under MSEs and the cost of establishing one plant of FRK of 5 MT capacity is Rs. 1 Crores and the SD and EMD as mentioned to be deposited as per RFP is too high. However, this condition has been slightly amended through letter dated 10.12.2024 and corrigendum dated 10.12.2024 issued by MARKFED regarding partial amendment in the tender issued for supply of FRK for custom milling in Kharif marketing year 2024-25, which states that “there would not be any relaxation in the FRK manufacturing capacity in MT per day basis. However, to ensure healthy participation, MARKFED will allow relaxation in the average annual turn over and FRK supply experience for the newly established plant. In case if any applicant does not have required FRK supplies experience and avg turnover as mentioned in clause 2.6, can also participate in the reverse e-auction. After allocation as per clause No. 7, applicant must furnish additional Security Deposit over and above stipulated Security Deposit at the time of agreement signing”. Therefore, such conditions imposing experience and additional SD for relaxations specially when it is for the first time ever that auction will be conducted for 10 supply of FRK is nothing but only to oust local manufacturing Units which is totally against Rules of 2002. 8. Mr. Sinha next submits that the Government of India by its ofÏce memorandum dated 25.07.2016 has clarified that Ministries/Departments may relax conditions of prior turnover and prior experience in cases of MSME subject to meeting of quality and technical specification. It is pertinent to mention that there is no requirement of any additional criteria to be provided for such relaxation. Similarly, the Government of India, vide its ofÏce memorandum dated 25.07.2017 has exempted MSMEs from providing earnest money for submitting its bid in a tender. Though MSEs have been exempted from bid security and EMD, still through amendment dated 10.12.2024, point No.14, Clause 3.20 has been added which states that "if applicant comes under MSME and Start-up Category" which says "For MSME related exemption, Government of India guidelines for Startup under Industrial Policy 2014 19, Para I point No. 54 is applicable. Applicant shall be registered with Industrial Department Government of Chhattisgarh and established Start-up in the Chhattisgarh. The applicant must have Valid Start-up certificate and must submit valid MSME certificate issued by the industrial department, Government of Chhattisgarh. The valid exemption certificate must be issued on or before 30.11.2024. if the applicant wish to apply for the relaxation in EMD deposit prior to auction need to submit Competency Certificate issued by the Industrial Department, Government of Chhattisgarh. The valid MSME Certificate should be issued on or before RFP publication date 30.11.2024. After scrutiny and validation of the document may get relaxation in EMD deposit only. On bare reading of this clause in full, even after petitioners being MSEs and having constitutional rights to avail the benefit given to MSEs of being given relaxations from EMD cannot avail the same as the said clause has barred them by asking for valid exemption certificate and competency 11 certificate which should be issued on or before 30.11.2024 i.e. the day tender was floated. The said clause has been added only to virtually defeat the relaxation and to give benefit to outside players. 9. Mr. Sinha submits that the petitioners are also aggrieved by Clause 6.6 which is amended through letter of amendment via SI No.18 which states that "After every Group/Lot auction closure only the EMD of L1 bidder will be blocked in the system. Rest of the bidders EMD will remain unblocked and they can participate in subsequent group auction if any remaining. After completion of all the group auctions the EMD of all the bidders along with L1 will also be blocked in the system. The CGMARKFED may offer other than L1 bidder to match the L1 price as per group/lot bid history report. After receipt of the Letter or email to match the L1 price bidder needs to complete the rest of formalities like agreement signing, SD deposits etc. as per RFP terms and conditions. In case he does not want to match the L1 price then he may request for the Withdrawal of EMD, if bidder wish to re-apply or send matching confirmation then it will not be considered." There are total 19 groups and for each group L1 will be declared but this clause is not clear if other bidders will be given opportunity to match the L1 price as per group or not. This clause suggests that the MARKFED has reserved the discretion of offering the bidders other than L1 to match the L1 price as per group and therefore it may allocate the work order on its own discretion. It is also not clear that, if MARKFED offers the bidders to match L1 then what will be the exact criteria of allocating the work. Hence, such clause is arbitrary as it provides unbridled discretion to respondent No. 2 to select bidders at its discretion which will be in violation of the legal requirement of providing equal treatment and level playing field to all the bidders. Since except to supply to Government for schemes, there is no other avenue available for FRK manufacturers, therefore FRK manufacturers had a legitimate expectation that the said product will be purchased by 12 Government as it has been done in the past practices and therefore new Units were set up in the State. This whole condition, is without any reasons and has never been practiced in the past and if as mentioned in the RFP, upon discretion of MARKFED, the other bidders are not given opportunity to match L1 then the industry will face irreparable loss or they might be forced to shut down also. The overall objective of the scheme of FRK is to address the anemia and micro-nutrient deficiencies reported in vulnerable sections of society. FRK plays a major role in achieving the desired objective. On one hand, the industry is being promoted and on other hand, where tenders are for limited quantity only, the State is restricting the entry by not giving preference to local manufactures and by involving the experience clause and asking for such huge amount of SD and EMD. In the previous financial year, a Notification was issued by Chhattisgarh Government, Food Civil Supplied and Consumer Department on 04.10.2023 whereby consent was given by State Government to supply of FRK through National Agricultural Cooperative Society Marketing Federation (NAFED) in Kharif marketing year 2023- 24. It was also mentioned in the said Notification that it should be ensured that the State Industrial Policy/ Rules of 2002 must be followed and thereafter, tender was issued by NAFED on 30.11.2023 for procurement of FRK through bidding system which was open only for the manufacturers for the State of Chhattisgarh, however, the said tender was challenged before this Hon'ble High Court and subsequently the same was withdrawn. Hence, even in past the respondent No. 1 has issued directions for compliance of Rules of 2002 to respondent No. 2 which has not been done by respondent No. 2 in the present RFP. As no action has been taken by the authorities and the conditions as mentioned above have not been amended by the respondent No. 2 which are not in conformity with Rules of 2002 and policies framed under the Act of 2006 knowing that the said policy is a legally enforceable State Policy and has 13 a force of law under the Constitution and therefore, the aforementioned clauses of the RFP are in violation of the Rules of 2002 and therefore, bad in law and liable to be struck down. 10. Mr. Sinha also submits that FRK is produced by near about 80 manufacturers in the State of Chhattisgarh and all these manufacturers falls under the category of MSE's and therefore they have right to claim benefit as given to them by the Government. If preference will not be given them, the Units of Chhattisgarh manufacturing FRK which is under a priority sector unit will be on verge of shutting down. Already, the capacity of the State of Chhattisgarh is more than the quantified amount still preference has not been given to MSE Units set in Chhattisgarh even though there is a legally enforceable policy with an object of promoting MSEs in the State and the policy provides for compulsory purchase from the MSEs situated in the State of Chhattisgarh if they agree with the rate and quality. Placing reliance on the judgment of the Apex Court in New Horizons Ltd. & Another v. Union of India & Others {(1995) 1 SCC 478}, Mr. Sinha submits that in the matter of entering into a contract, the State does not stand on the same footing as a private person who is free to enter into a contract with any person he likes. The State cannot act arbitrarily at its sweet will like a private individual, but its action must be in conformity with the standards and norms which are not arbitrary, irrational or irrelevant. 11. Mr. Sangharsh Pandey, learned Government Advocate, relying on the return filed, submits that the RFP dated 28.11.2024 has been issued by the respondent No.02 inviting online bids from FRK manufacturers from all over India for supply of 84,000 MT FRKs. Earlier, the entire Chhattisgarh was divided into eight groups or clusters. However, later on a corrigendum was issued by the respondent No. 2 on 10.12.2024, whereby, respondent No. 2 has increased the number of groups from 08 to 19. An estimated value of the entire tender is approximately Rs. 400 14 Crores. Supply of Fortified Rice is an initiative of the Government of India for the welfare of people of the Country particularly for the good of the poor and downtrodden. This scheme has been launched under PMGKAY (Pradhan Mantri Gareeb Kalyan Anna Yojna) in order to make out the nutritional security in the Country to address Anemia and Micro Nutrients Deficiency in the Country. Anemia remains a wide spread issue in India, affecting children, women and men across various age groups and income levels. Besides iron deficiency, other vitamins and mineral deficiencies, such as Vitamin B12 and Folic Acid, also persisted impacting the overall health and productivity of the population. Fortification has been used globally as a safe and effective measure to address Anemia and Micro Nutrient Malnutrition in the vulnerable population. Rice is an ideal vehicle for supply micro nutrients in the Indian context as 65% of India's population consumes rice as a staple food. Rice fortification involves the addition of FRK enriched with micro nutrients (Iron, Folic Acid, and Vitamin B12) as per standards prescribed by FSSAI to regular rice (CMR). The tender contains requirement procuring around 84,000 MT of FRK's for the Central Pool as well as State Pool. Out of the 84,000 MT, around 70,000 MT of FRK is meant for use by the Central Government and remaining 14,000 MT is meant for use by the State Government. As the tender is concerned with the health and welfare of the common people of the Country and therefore, it is the responsibility of respondent No.02 to oversee that the high/good quality of FRK's is procured at the reasonable rate and the bidders or participants who are having the capacity, experience and competency as FRK manufacturer are allowed to participate so that, the supply of the FRK can be done efÏciently, smoothly and without any hindrance within stipulated time. 12. Mr. Pandey further submits that though the petitioners have raised the issue regarding the violation of Rules of 2002, but, they have not dealt 15 with the object/purpose of the Rules of 2002. The first objective of the Rules of 2002 is that the various Departments of the State Government should be able to procure or receive high quality products in reasonable rates and within stipulated time period. Secondly, the State Government should be able to procure products at minimum rates, thirdly, to provide encouragement to the local small industries, fourtly, that if any product is being manufactured or produced by the industrialists belonging to Scheduled Caste, Scheduled Tribes or OBC category, then preference should be given to such industries if the rate of the product as well as the quality is equal in comparison. In order to fulfill the objective of the Rules of 2002, the respondent No. 2 had issued the impugned tender/RFP to procure FRK's in large quantity. High quality products at reasonable or minimum rates can only be procured by respondent No.02 by calling tenders from competitive manufacturers of FRK's throughout the Country. In other words it is submitted that, if the tender is restricted at the local level only, then it would not be possible to procure high quality products of FRK's at a reasonable or minimum price. An updated manual has been issued by the Government of India, Ministry of Finance, Department of Expenditure and the same is available on Commission's website, as stated in the circular dated 11.07.2022. Subsequent to the issuance of the circular dated 11.07.2022 again a circular dated 06.10.2023 was issued in which it has been specifically mentioned at paragraph 2 that, Department of Expenditure in collaboration with the Central Vigilance Commission has updated and released the manuals on (i) Procurement of Goods, (ii) Procurement of workers and (iii) Procurement of consultancy and other services. At paragraph 3 of the circular dated 06.10.2023, it is stated that vide Commission circular No. 14/07/22 dated 11.07.2022, CEO's and CVO's of Central Government organizations were advised to align their own procurement manuals/ guidelines with the provisions of updated manuals issued by DOE. Later 16 on, DOE vide its OM dated 04.08.2022, and DPE, vide letter dated 10.08.2022 also advised the ministry, Department of Public Sector Enterprises to bring their procurement manual/guidelines in sync with the updated manuals of DOE, released on 01.07.2022. The earlier circular dated 11.07.2022 was meant for communication to all CEO's and CVO's of Central Government organizations and they were directed to bring their procurement manuals/guidelines in sync with the updated manuals of DOE, released on 01.07.2022. The said circular was meant for communication to the petition is itself against the objective of the Rules of 2002. 13. Mr. Pandey further submits that the petitioners have heavily relied upon the Rule 13(4) of the Rules of 2002, stating that compulsory and preferential purchase should be made from the MSEs which are located in the Chhattisgarh. In this regard, Rule 13(4) of the Rules of 2002, comes with a rider that in case of quality and value of the product is reasonably good and if the Unit is having the required competency/ capacity, then only the purchase should be made from the State industries. The petitioners have relied upon the Rule 13(3) of the Rules of 2002, wherein, it has been provided that, if a Department of the Government is purchasing the product, the said Sub-Rule (3) also comes with the rider that the industry should be a local startup as defined in Sr. No. 54 of Annexure 1 of the Industrial Policy of 2014-2019 and the bidder registration should be found valid in the website of the Government of India. It is further provided that the quality of the product should be reasonable and the bid rate should also be equal to the L1 bid. The respondent No. 02 being the tender issuing authority is the best interpreter of the terms and conditions of the RFP/NIT. There is no bar or restriction in Rules of 2002 to call tender at the national level. For the procurement of the FRK, by calling competitive bid the respondent No. 2 had issued this national tender for obtaining best quality products at 17 minimum pricing. The petitioners have raised contention regarding Clause 2.6 of the NIT/RFP which provides for the requirement of experience of the bidder of past three years of supply of FRK's to State Government, Central Government or any Public Sector Undertaking. Clause 2.7 of the RFP itself provided that in case if the applicant does not have required FRK supply experience and average annual turnover as mentioned in Clause 2.6 can also participate after furnishing additional 3% Security Deposit for and above stipulated EMD / SD. The requirement of 3% SD has further been diluted through corrigendum and it has been reduced to 2% of Additional SD instead of 3%. The above mentioned facts shows that the respondent No.02 is nowhere restricting any applicant from the bidding process and is prepared for accommodating them in the bidding process, if they fulfill the requirements as mentioned in the tender/RFP and its corrigendum. The earlier CVC guidelines of 2002 provided for the three years experience. The CVC guidelines though, are not mandatory in nature but the State Government authorities at the time of issuance of the tender follows its prescriptions to maintain the uniformity in the tender process. In other words, CVC guidelines are not binding upon the State and its authorities (including MARKFED). From the perusal of the circular dated 17.12.2002, (Annexure R-2/3) as well as circular dated 11.07.2022, (Annexure P/12) it appears that, nowhere it has been stated that, it would be applicable to the State Government. It is further submitted that, in the circular dated 17.12.2002, it has been specifically mentioned at para 4 that, while framing pre-qualification criteria, the end purpose of doing so should be kept in view. The purpose of any selection procedure is to attract the participation of reputed and capable firms with proper track records. The pre-qulification conditions should be exhaustive, yet specific. The factors that may be kept in mind while framing the pre- qualification criteria include the scope and nature of work, experience of 18 firms in the same field and financial soundness of firms. Thus, it is the discretion of the State Government, whether to follow the CVC guidelines or not. Further, the intention behind keeping the three years experience criteria is to make sure that the successful bidder or participant will have the required experience of supply of FRK and being an experienced. supplier the procurement activity can be completed efÏciently without any fail on the part of the supplier. Therefore, to ensure the successful and accomplishment of the supply, the experience criteria of three years have been prescribed in the RFP. 14. Mr. Pandey further submits that the allegation of the petitioners with respect to the applicability of the CVC guidelines in the tender issued by the respondent No.2 is baseless and without any substance. Herein, it would be pertinent to mention that, the circular dated 11.07.2022 issued by CVC is with respect to updating of manual on procurement of goods, services, works CEO's and CVO's of Central Government organizations and not to the State Government. Thus, the said circular dated 11.07.2022 has no applicability upon the State Government. The Department of Expenditure has released manual for procurement of goods on 01.07.2022. It has been provided in para 1.3 (sub-para 2) that the procurement entities who can benefit from this manual include ministries, departments, or a unit thereof, or an attached or supporting ofÏces/units, Central Public Sector Enterprises, any other body substantially owned or controlled by or receiving substantial financial assistance from the Central Government. Therefore, the said manual is being applicable to the Ministries, Departments of the Central Public Sector Enterprises or including bodies which are substantially owned or controlled by or receiving substantial financial assistance from the Central Government. In the present case the respondent No.2 MARKFED is not receiving any substantially financial assistance from the Central Government and it is a co-operative society and incorporated 19 under the Co-operative Society Act, 1960. MARKFED is an apex level federation of co-operative marketing society in the State of Chhattisgarh which came into existence on 01.11.2000. MARKFED executes the work of paddy procurement under price support scheme and supply of chemical fertilizers and plant production material to the farmers of the State as per the instructions of the Government. Sub-para 4 of para 1.3 further provides that, this manual is to be taken as generic guidelines which have to be necessarily broad in nature. The Ministries/ Departments are advised to supplement these manuals to suit their local/specialized needs by issuing their own detailed manuals, standard bidding documents. Major goods procuring Ministries/Departments like the Ministry of Defence, Ministry of Railways etc. have their own detailed guidelines tailored to unique individual requirements. Therefore, the said manual is meant for serving as a generic reference. Para 4 of the manual deals with applicability clause and from perusal of the same, it is clear that the same is not applicable to the State Government. 15. Mr. Pandey submits that para 1.10.7 of the said manual deals with "Public Procurement Policy for Micro and Small enterprises (MSE's). Sub-para III of para 1.10.4 of the manual specifically provides that the policy is applicable to all the Central Government Ministries / Departments / PSU's. Therefore, the aforesaid clause also makes it further clear that, the public procurement policy for MSEs is not applicable to the State Government Ministries, its departments and its PSU's. Hence, the allegations leveled by the petitioners are not tenable in the eyes of law and the present case being devoid of merit and substance is liable to be dismissed at the threshold. In the manual for procurement of goods, the word 'experience' has been used at more than 20 places in the manual for procurement of goods, for example Clause 11 deals with Modal Clauses/Certificate, which reads as under: 20 "Model Clauses and Model Certificates which may be inserted in tenders/obtained from Bidders are given at Annexure-2F. While adhering to the substance of the Order, procuring 10 entities are free to appropriately modify the wording of these clauses based on their past experience, local needs etc. without making any reference to Department of Expenditure." 16. Paragraph 1.10.4 relates to public procurement policy for Micro and Small Enterprises (MSE's) under Sub-para 1 of (iii). Sub-para (1) of para 1.10.4 reads as under: “1) To reduce transaction cost of doing business, MSEs will be facilitated by providing them tender documents free of cost, exempting MSEs from payment of earnest deposit, adopting money procurement to bring transparency e-in tendering process. However, exemption from paying Performance Bank Guarantee is not covered under the policy. MSEs may also be given relaxation in prior turnover and prior experience criteria during the tender process, subject to meeting of quality and technical specifications. However, there may be circumstances (like procurement of items related to public safety, health, critical security operations and equipment, etc.) where the procuring entity may prefer the vendor to have prior experience rather than giving orders to new entities.” 17. It is specifically provided that, there may be circumstances like procurement of items related to public health and public safety etc. where procuring entity may prefer the vendor to have prior experience rather than giving order to new entities. Hence, it is submitted that, the present tender is directly related to the health of the public and therefore, the respondent no.2 has rightly required the participants to have the prior experience. Similarly, the requirement of previous experience has been dealt in Sub-para (a) of Clause IX at page No. 23 of the manual, Sub- para (iv) of the para 4.13.4 at page No. 72 of the manual, para 4.14.4 at page No. 76 of the manual, Sub-clause (iii) of para 5.1.1 at page No. 92 of the manual, Sub-para Clause I of Clause XI at page No. 93 of the manual, Clause 5.1.3 at page No. 96 of the manual, Annexure 2F at page 21 No. 194 of the manual, Annexure 9 at page No. 205 of the manual, and the word experience and past performance has also been used at page No. 206 and page No. 234 of the manual. Therefore, it is respectfully submitted that, though the CVC guidelines and the manual for procurement of goods released on 01.07.2022 is not applicable upon the State Governments and its entities. However, even if it is assumed that the manual or circular is applicable in the present case, then also the State or MARKFED are not precluded from asking requirement of prior experience. 18. With regard to questioning of clause 3.2 of the RFP, Mr. Pandey submits that the respondent No.2 issued the tender on 28.11.2024 and required the participant MSMEs and startups to have a certificate from Industrial Department as on 30.11.2024. The participant who are MSME and startups who are claiming the benefits of MSME Act are supposed to have themselves registered with the Industrial Department of Chhattisgarh regarding the same and the procurement process would be stalled of the requirement of the participation of certificate. With respect to clause 6.6 of the RFP, it is submitted that the respondent No. 2 had issued the RFP and the respondent No. 2 itself would be the best judge of its requirement regarding the tender process. The author of the tender document is the best person to interpret its documents and requirements. The only requirement of law, for such process of decision making by the tender inviting authority, is that it should not be suffering from illegality. irrationality, mala-fide, perversity, or procedural impropriety. No such case being made out, the decision of the tender inviting authority is fair, just, reasonable, and legal. Reliance is placed on the judgment of the Apex Court in Afcons Infrastructure Limited v. Nagpur Metro Rail Corporation Limited & Anr. {(2016) 16 SCC 818} and Silpi Constructions Contractors v. Union of India {2019 SCC Online SC 1133}. 19. Mr. Prafull N Bharat, learned Senior Advocate assisted by Mr. Harshal 22 Chouhan, learned counsel for the respondent No. 2, in addition to what has been stated by learned State counsel, submits that respondent No. 2 is a Co-operative Society registered under the provisions of Chhattisgarh State Cooperative Society Act 1961, which work as a nodal agency of the Government of Chhattisgarh for procurement of paddy from the farmers and further carry out the function regarding deposition of custom milled procured rice, to the Central and State authorities, in accordance with the policy framed by the State Government for respective Kharif Financial Year. Vide notification dated 24.10.2024, the respondent No. 1 issued the Custom Milling Policy for Kharif Financial Year 2024-25. As per the policy, estimated 70 Lakh MT of fortified rice has to be deposited with the Central Government Pool/Food Corporation of India and further 14.30 Lakh MT of fortified rice has to be deposited with the Civil Supplies Corporation of state of Chhattisgarh. For achieving the said target of supply of approximately 84 Lakh MT Custom Milled Rice, requirement for procurement of 84,000 MT of FRK arose. The State of Chhattisgarh is the second largest major contributor of fortified rice after the State of Punjab in the Central Pool of India, which requires extensive operation of procurement of FRK within a time frame with cost effectiveness and quality control. To achieve the said target in cost effective and transparent manner and for compliance of clause 4.7.2 of the Custom Milling Policy 2024-25, necessity of floating the tender was recommended by the respondent No. 2 for discovery of appropriate/ lower price of FRK by the financially and technically capable entities through competitive bidding, so that the procurement and the supply of FRK can be executed effectively and smoothly without any fail. On 19.11.2024, the respondent No. 1 made a communication to the respondent No. 2 to issue tender for purchase of FRK for Kharif Financial Year 2024-24 through respondent No. 3 and in compliance of the order 23 dated 19.11.2024, the respondent No. 2, on 30.11.2024 floated the tender by issuing RFP (Notice inviting tender) inviting online application from prospective FRK manufacturers for supply of Fortified Rice Kernels with three micro nutrient (Iron Folic Acid and Vitamin B12) in 20 kg Bags to be supplied to the specified depots within the group geography for which the bidder has been awarded supply work order.Vide clause 1.3 of the RFP/NIT the applications were invited from all over the India of the FRK manufacturer, so that due to competitive bidding amongst the rice millers, lower rate of FRK can be discovered and expenditure of public exchequer be saved. Vide clause 2.6 of the eligibility condition in the RFP, the requirement regarding FRK supply experience to State and Central Government or PSU during immediate past 3 year was kept in compliance of the circular/guidelines prescribed by the CVC. The ofÏce memorandum dated 17.12.2002 clearly provides for pre-qualification criteria in the case of store/purchase contracts. The said guideline provides that pre-qualification/post-qualification shall be based entirely upon the capability and resources of prospective bidders to perform the particular contract satisfactorily, taking into account their (i) experience and past performance on similar contracts for last 2 years (ii) capabilities with respect to personnel, equipment and manufacturing facilities (iii) financial standing through latest I.T.C.C., Annual report (balance sheet and Profit & Lost Account) of last 3 years. Further, the requirement regarding the experience of the bidder was kept, so that the experienced bidder who get awarded with the work order can effectively execute the contract without any fail because non-execution of the contract in any condition can be hazardous to the larger public interest. However, for providing healthy participation and for providing opportunity and preference to the FRK manufacturer of the Chhattisgarh, the condition regarding requirement of supply experience was diluted so that any entity 24 who do not posses the required supply experience and average annual turnover can furnish additional 3% SD which was further revised to 2%. 20. Mr. Bharat next submits that after issuance of RFP pre bid meetings of prospective bidders were also duly called for the clarification of RFP conditions and further for considering the objection of the prospective bidders regarding any contents of the RFP. The prospective bidders including some of the petitioners made objection regarding the requirement of clause 2.7 of the RFP which requires additional 3% SD by the newly established plants who do not possess the experience criteria. Further objection regarding clause 7.1 was also raised which required 5.28% of EMD deposit to participate in e-auction. In the RFP issued on 30.11.2024, the Districts of the State were divided into 8 groups to which supplies to be made and for which the bids were invited due to 8 large groups of Districts the requirement of various parameter such as minimum processing capacity, minimum turnover, supply experience. Objection regarding the same was raised by the small and newly established Units in the pre-bid meeting. Considering the contentions of the small and newly established entities, for enhancing their participation and chance of being successful bidder the respondent No. 2 made 3 major amendments vide issuing corrigendum dated 10.12.2024 in the clause 2.7 and 7.1 requirement of additional 3% of SD was reduced to 2% and requirement of EMD deposit of 5.28% deposit was reduced to 3.28%. Further in Annexure-II of the corrigendum, the 8 groups of Districts were further divided into 19 groups reducing the required eligibility parameter drastically, resulting in greater opportunity and space to the local, small and new establishments to participate in the bidding process. In the above mentioned corrigendum dated 10.12.2024, clause 2.2 of the RFP which provided for compulsory necessity of own rice mill of the manufacturer bidder was relaxed making manufacturer who having rented or leased running manufacturing unit, eligible. Further vide 25 corrigendum dated 10.12.2024, clause 3.20 was inserted providing further relaxation for the applicants coming under MSME and start up category is granted in accordance with the Industrial Policy 2014-19 and point 54 of para I of Definition is provided which is in light of Rule 4.7(B) of the Rules of 2002. In the subsequent bid meeting objection regarding clause 5.4 of the RFP which provides for the cut-off date of submission of document by 24.12.2024, was raised and considering the objections another corrigendum was also issued on 19.12.2024 and the cut-off date was further relaxed and the last date of submission of document was changed to 26.12.2024. The above-mentioned conduct of the respondent No. 2 is self sufÏcient to demonstrate that in order to provide preference and opportunity to the local, small and newly established entities, it has made all the changes to the extent possible. So far as the allegation of the petitioners that the respondent No. 2 has ignored the Rules of 2002, Mr. Bharat submits that the Rules of 2002 has been enacted with the purpose of procurement of high-quality articles at appropriate and minimum rate and for the encouragement of small-scale industries. The relevant part of the purpose as enumerated in the Rules of 2002, reads as under: "भण्डार ्ቅय नि(cid:10)यम 2002 का उ ्ቌेश्य (अ) राज्य शास(cid:10) के नि(cid:21)भागों को उ्ሴ गुण(cid:21)्ቈा (cid:21)ाली साम्ቇी उचि!त दरों पर नि(cid:10)्ቐय समया(cid:21)चि& में ्ቚा् हो सके। (ब) राज्य शास(cid:10) को न्यू(cid:10)तम दरों पर साम्ቇी आपूቔኌत सुनि(cid:10)चि्ቐत हो सके । (स) स्था(cid:10)ीय लघु उ्ቕोगों को ्ቚोत्साह(cid:10) निमले ।" 21. A bare perusal of the above provision of the shows that the main purpose with which rules has been enacted is for the procurement of high-quality articles at minimum price within a time frame and further local small- scale industries be encourage for such procurement. While issuing the RFP for procurement of FRK, the respondent No. 2 has considered all the above-mentioned aspects. The tender for procurement of FRK has been floated with the sole intention of price discovery of the FRK by 26 competitive bidding so that the procurement can be completed within the time bound manner on appropriate lower rate so that the expenditure of public exchequer can be done efÏciently. Further at the same time to ensure the participation of small scale, newly established manufacturers the conditions regarding eligibility, EMD, past work experience & turnover has been further diluted. Further for encouraging the local and small-scale manufacturer the 8 Group of districts of the state has been further divided into 19 groups which has resulted in lower parameters of the eligibility requirements providing opportunity to the small and medium enterprises to participate in the bidding process. The petitioners in the instant petition have further raised objection regarding the Clause 1.3 of the RFP which provides for invitation of application from the manufacturers of FRK from all over India. The petitioners contend that the said clause is not in confirmation with the Rule 13 of the Rules of 2002 which provides for preferential purchase from small scale establishment of Chhattisgarh. The Rules of 2002 nowhere prohibits the invitation of application from all over India. In fact, the Rule 4.3.3 of the Rules of 2002 provides for the procedure to be adopted for open tender and prescribes that in case of the value of tender exceeds Rs. 20 Lakh the NIT should be published in the newspaper at national level. Further Rule 4.5 of the Rules of 2002 which has been inserted vide notification dated 09.05.2022, prescribes the time frame of calling global tenders. Relevant part of the Rule 4.3.3 and Rule 4.5 reads as under: “4.3.3 खुली नि(cid:10)नि(cid:21)दा प्ቍचित इस प्ቍचित से हमेशा लोक नि(cid:21)्ሺाप(cid:10) ्ቛारा नि(cid:10)यमा(cid:10)ुसार खुली नि(cid:10)नि(cid:21)दाएं बुलाकर कर(cid:10)ा !ानिहए। नि(cid:10)नि(cid:21)दा बुला(cid:10)े हेतु नि(cid:10)म्(cid:10)ा(cid:10)ुसार लोक नि(cid:21)्ሺाप(cid:10) निकया जा(cid:21)े :- (1) रु 3,00,001 से 5.00 लाख तक हो स्था(cid:10)ीय स्तर के बहु्ቚ!ारिरत एक समा!ार प्ቔ में (2) रु 5.00 लाख से अचि&क तथा रु 10.00 लाख तक हो ्ቚदेश स्तरीय बहु्ቚ!ारिरत दो समा!ार प्ቔ में (3) रु 10.00 लाख से अचि&क तथा रु 20.00 लाख तक हो-्ቚदेश स्तरीय बहु्ቚ!ारिरत दो समा!ार प्ቔ में तथा रा्ቖ्रीय स्तर के एक समा!ार प्ቔ में 27 (4) रु 20.00 लाख से अचि&क ्ቚदेश स्तरीय बहु्ቚ!ारिरत दो समा!ार प्ቔ में तथा रा्ቖ्रीय स्तर के दो समा!ार प्ቔों में नि(cid:10)नि(cid:21)दा बुला(cid:10)े की ्ቚनि्ቅया इंटर(cid:10)ेट पर की जा सके गी 4.5 नि(cid:10)नि(cid:21)दा हेतु समय सीमा नि(cid:10)म्(cid:10)ा(cid:10)ुसार होंगी नि(cid:10)नि(cid:21)दा प्ቍचित अ(cid:21)चि&/निद(cid:21)स ्ቚथम आमं्ቔण नि्ቛतीय आमं्ቔण तृतीय आमं्ቔण सिसनिमत नि(cid:10)नि(cid:21)दा प्ቍचित खुली नि(cid:10)नि(cid:21)दा (रु 3,00,001 से अचि&क रु 10 लाख तक) खुली नि(cid:10)नि(cid:21)दा (रु 10 लाख से अचि&क ग्लोबल नि(cid:10)नि(cid:21)दा 15 21 30 45 10 14 20 30 5 7 10 20 22. Mr. Bharat submits that a bare perusal of the above mention clauses clearly shows that the Rules of 2002 not only provides for issuance of National/Global tenders but also provide for the procedure to be followed on issuance of national tenders. In the present matter the purpose behind calling bid invitation from all over India is not only for the price discovery through competitive bid but is also for restraining the bidders from the practice of bidding in collusion and distortion of rate by bid rigging by forming cartels. The petitioners have further alleged that the respondent No. 2 has invited application from all over India without giving any preference to the local manufacturer which indicates vested interest of the respondent No. 2 for benefiting manufacturer situated outside the State, which is without any pith and substance. The procurement function assigned to the respondent No. 2 is being carried out for eradication of anemia and micro nutrient deficiency which is for the larger public interest. The respondent No. 2 being a nodal agency of the State Government is duty bound to accomplish the procurement activity in transparent and cost-effective manner by discovery of appropriate rate of FRK by competitive bidding among the capable manufacturer so that the execution of whole process may be done smoothly in prescribe time frame. In fact, calling of bid invitation from all over India weeds out any 28 chance of collusion between the respondent No. 2 and the bidder and brings more transparency in the procurement process. The respondent No. 2 while issuing RFP and calling bid from all over the India has also made provisions for providing preferential treatment to the small and local manufacturer by relaxing, EMD and experience and turnover requirement and has further sub-divided the 8 groups of District to 19 groups, after considering the objections in the pre bid meetings, all such relaxation has been provided in favor of the local and small manufacturer. The whole intention of the respondent No. 2 for keeping the prescribed financial and experience criteria is to select such manufacturer which can execute the contract without any fail as the procurement of FRK is for the greater public interest of India. Most importantly, the petitioners have nowhere mentioned their credentials regarding their application status, registered working and financial capacity. Further, may not be inappropriate to say that the ulterior motive behind filing the present petition can be for curbing the competition with efÏcient bidders and chances of formation of cartel amongst the local manufacturer for distortion of prices by bidding in collusion cannot be ruled out and in view of the above submission, Mr. Bharat prays for dismissal of the writ petition. With regard to the scope of interference by the Courts in the matters relating to contract/tender, Mr. Bharat places its reliance on the decision of the Apex Court in National High Speed Rail Corporation Ltd. Vs Montecarlo Ltd. {(2022) 6 SCC 401}. 23. Mr. Chandradeep Prasad, learned counsel for the respondent No. 3 submits that the respondent No. 3 has no direct or substantial interest in the matter under consideration. There is no relief directly or specifically sought by the petitioner against it. The respondent No. 3, NCDEX e-Markets Limited (NeML) is a Company incorporated under the Companies Act, 1956, and, a subsidiary of National Commodity & Derivatives Exchange Limited (NCDEX), which is a leading Commodities 29 Exchange governed by SEBI, and, is majorly owned by Life Insurance Corporation of India (LIC), Canara Bank, National Bank for Agriculture and Rural Development (NABARD), National Stock Exchange of India Limited (NSE) Punjab National Bank (PNB), and Indian Farmers Fertilizer Cooperative Limited (IFFCO). It offers its e-auction trading platform for trading and price discovery in a host of commodities both, in agricultural and non-agricultural to various market participants, primary producers such as farmers, traders, processors etc., as well as offers its e-auction services to various corporations, central and state governments and semi government organizations, etc. It conducts online bidding/e-auction through its platform on behalf of its clients, and acts as an intermediary, without interfering into actual decision making or direct involvement in the bidding process and selection of the highest or the lowest bidder, whichever the case may be. In the present case, the respondent No. 2 had appointed the respondent No. 3 to conduct reverse e-auction for the supply of Fortified Rice Kernels (FRK) rice to MARKFED from various eligible suppliers through the e-auction platform of NeML. Apart from undertaking participant registration, technical document collection and evaluation, addressing queries of participants and assisting them for registration and allied activities for and on behalf of MARKFED, i.e. Respondent No. 2, NeML is merely an e-auction platform service provider for conducting the reverse e-auctions for its clients. Out of 18 petitioners, three petitioners namely, M/s Shreya Traders, M/s SS Industries, M/s Earthika Agro have not completed the registration formalities with the respondent No. 3 and out of the said 18 petitioners, two petitioners namely M/s Banke Bihari Industries and M/s Jay Shri Balaji Agrotech have completed registration formalities with the respondent No. 3 on the date of filing of the present writ petition before this Hon'ble High Court, i.e. on 16.12.2024. Further, out of 18 petitioners, seven petitioners namely: M/s M/s Sarwa Mangla Food Industries Private 30 Limited, M/s Jagat Agro, M/s Namo Overseas M/s SK Global, M/s Sunita Agrotech, M/s Vikas Agro products, M/s Hariom Rice Industries have completed registration formalities with the respondent No. 3 during 18.12.2024 to 23.12.2024, i.e. after filing the present writ petition and out of the said 18 petitioners, only six petitioners namely M/s Maa Kanta Pure FRK, M/s Banke Bihari Rice Mill, M/s Shri Shiv Foods, M/s Anant Rice Industries, M/s Siddhi Vinayak Industries, M/s Devcon Foods Private Limited, have completed the registration formalities with the respondent No. 3, before filing the present writ petition. So far as the status of the technical evaluation and document submissions status undertaken by respondent No. 3 for the respondent No. 2, out of 18 petitioners, only two petitioners namely, M/s Maa Kanta Pure FRK and M/s Jai Shri Balaji Agrotech have submitted their respective technical documentation for evaluation till 16.12.2024. The respondent No. 3 is only acting as a price discovery service provider and shall not take any responsibility in connection with any disputes that may arise during the tenure of the e-aution/contract. Both seller (petitioners) and buyer (MARKFED) completely absolve NeML of any consequences resulting from this auction and further any disputes between buyer/service receiver and seller/service provider shall have to be resolved amicably by the parties without any recourse to NeML. Respondent No. 3/NeML has no role to play apart from offering its e-auction platform on behalf of respondent No. 2/MARKFED for price discovery for the purchase of FRK. Furthermore, the respondent No. 3 has no role to play with the RFP terms and conditions and its suitability to any of the party, except acting as per the instructions of the respondent No. 2/MARKFED. 24. Rejoinder has also been filed by the petitioners to the return filed by the respective respondents. It is submitted by Mr. Sinha that there are 80 plants of FRK in the State of Chhattisgarh and the total capacity of those plants to produce FRK is more than 3 times of the target supply and as 31 such, the target of procurement of FRK within time specified and in cost effective manner can be achieved by the manufacturers of the State itself. It has been reiterated that the respondent No. 2 is bound to follow the Rules of 2002. It is also submitted that the CVC guidelines are advisory in nature and need not be applied in contravention of the Rules of 2002. The possession of experience and turnover is not a deciding factor for adjudicating the capability of a bidder to supply the requisite quantity as it can be simply waived off by submitting additional SD which can be easily done by bidder having greater financial capability which will in turn affect the MSME bidders only. 25. We have heard learned counsel for the parties, perused the pleadings and documents appended thereto. 26. During pendency of this petition, some IAs were filed by the petitioners seeking deletion of certain petitioners from the array of the cause title which have been allowed and as such, initially there were in total 18 petitioners, but as on date, the name of petitioner No. 5-M/s Namo Overseas, petitioner No. 6-M/s. Banke Bihari Rice Mills, petitioner No. 7- M/s. S.K.Global, petitioner No. 11-M/s. Anant Rice Industries and petitioner No. 12-M/s. Siddhi Vinayak Industries, (in total five) have been deleted. 27. The present petition was filed on 16.12.2024 and it came for hearing for the first time before this Court on 20.12.2024 and while issuing notices to the respondents herein, an interim order to the effect that till the next date of hearing, the effect and operation of the request for proposal dated 30.12.2024 (Annexure P/1) and further proceedings, were directed to remain stayed. Thereafter, the matter was listed on various dates viz. 15.01.2025, 27.01.2025, 10.02.2025, 20.02.2025 when the learned counsel appearing for the parties prayed for time for filing returns/rejoinders and lastly today, on 04.03.2025 the final arguments 32 have been advanced. The interim relief granted on 16.12.2024 has also continued till date. 28. Since the matter relates to supply of fortified rice kernels with three micro nutrients to be supplied to the specified depots which in turn would be distributed amongst the poor and downtrodden, there is a sense of urgency in this petition. The task has to be completed in a time bound manner with quality control also. The main contention of the petitioners are that various provisions of Rules of 2002 have been violated and despite being MSEs, no preference is being given to the petitioners who are also involved in manufacture of FRK. It is further the contention of the petitioners that arbitrary conditions have been imposed while floating the NIT/RFP and those conditions are virtually restricting the petitioners from participating in the RFP. Another contention raised by the petitioners is that since 2019, the FRK was directly supplied to Rice Mills in State through free sale by manufacturers and there has been no direct procurement of FRK by State of Chhattisgarh. Further, there has never been any restriction whatsoever as to turnover/experience, as it was a free sale market and the only criteria was quality check by NABL certified labs. Whatever may be the procedure adopted earlier, the State is always at liberty to adopt new course / ways for procurement of any commodity. The State has to see as to which conditions would be beneficial in its interest as the money that is utilised is the public money which has to be utilized in the most cost effective method. It is an admitted position that after issuance of the RFP, a pre-bid meeting of the prospective bidders was called for the clarification of the RFP conditions and for considering their objections also. The petitioners had raised objection with regard to clause 2.7 and 7.1 of the RFP. The grievance raised by the petitioners was addressed by the respondent authorities and three major amendments were made by issuing corrigendum dated 10.12.2024 in clause 2.7 and 7.1 of the RFP and the requirement of 33 additional 3% of SD was reduced to 2% and requirement of 5.28% of EMD was reduced to 3.28%. Further, in Annexure II of the corrigendum, the 8 groups of Districts were further divided into 19 groups reducing the requied eligibility parameter resulting in greater opportunity and space to the local and small Units. Further, clause 2.2 of the RFP required for compulsory necessity to own rice mill for the intending bidder which a has been relaxed and now, the manufacturer who is having rented or leased running manufacturing Unit, has also been made eligible for participating in the RFP. Further, clause 3.20 has been inserted vide the corrigendum dated 10.12.2024 providing further relaxation for the bidders coming under the MSME and startup category under the Industrial Policy 2014-2019. In subsequent meeting, objection regarding 5.4 of the RFP was also considered and the cut off date for submission of documents was extended to 26.12.2024. Hence, from the said conduct of the respondent No. 2, it is evident that there was no ill will on the part of the respondent authorities and to the extent possible, changes/ amendments have been made so as to provide preference to the local, small and newly established Units. So far as applicability of the Rules of 2002 is concerned, the very purpose of the said Rules is to procure high quality articles at appropriate and minimum rate and for the encouragement of the small scale industries. The tender for procurement of FRK has been floated with the sole intention of price discovery of the FRK by competitive bidding. There is no specific prohibition in the Rules of 2002 that any NIT/RFP can be floated on pan India basis and the same has to be done within the State itself. Rule 4.3.3 of the Rules of 2002 provides for various conditions in which the tender can be floated either in the State level or at National level. One of the objective of inviting bids from all over the Country is to restrict the bidders from forming a cartel and distorting the rate by bid rigging. 34 29. In Afcons Infrastructure Ltd. v. Nagpur Metro Rail Corpn. Ltd.1, the Hon’ble Supreme Court has observed that the owner or the employer of a project having authored the tender documents, is the best person to understand and appreciate its requirements and interpret its documents. 30. In N.G. Projects Ltd. v. Vinod Kumar Jain2,, the Apex Court has observed as under:
Decision
“22. The satisfaction whether a bidder satisfies the tender condition is primarily upon the authority inviting the bids. Such authority is aware of expectations from the tenderers while evaluating the consequences of non-performance. In the tender in question, there were 15 bidders. Bids of 13 tenderers were found to be unresponsive i.e., not satisfying the tender conditions. The writ petitioner was one of them. It is not the case of the writ petitioner that action of the Technical Evaluation Committee was actuated by extraneous considerations or was malafide. Therefore, on the same set of facts, different conclusions can be arrived at in a bona-fide manner by the Technical Evaluation Committee. Since the view of the Technical Evaluation Committee was not to the liking of the writ petitioner, such decision does not warrant for interference in a grant of contract to a successful bidder. 23. In view of the above judgments of this Court, the Writ Court should refrain itself from imposing its decision over the decision of the employer as to whether or not to accept the bid of a tenderer. The Court does not have the expertise to examine the terms and conditions of the present day economic activities of the State and this limitation should be kept in view. Courts should be even more reluctant in interfering with contracts involving technical issues as there is a requirement of the necessary expertise to adjudicate upon such issues. The approach of the Court should be not to find fault with magnifying glass in its hands, rather the Court should examine as to whether the decision-making process is after complying with the procedure contemplated by the tender conditions. If the Court finds that there is total arbitrariness or that the tender has been granted in a malafide manner, still the Court should refrain from interfering in the grant of tender but instead relegate the parties to seek damages for the wrongful exclusion rather than to injunct the execution of the contract. The injunction or interference in the tender leads to additional costs on the State and is also against public interest. Therefore, the State and its citizens suffer twice, firstly by paying escalation costs and secondly, by being deprived of the infrastructure for which the present-day Governments are expected to work.” 31. Recently, the Apex Court, in the matter of Banshidhar Construction Pvt. Ltd. v. Bharat Coking Coal Ltd. & Others, {Civil Appeal No. 1 2