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PAMIDIGHANTAM SRI NARASIMHA, SANDEEP MEHTA
Lifecare Innovations Pvt. Ltd. – Appellant
Versus
Union Of India – Respondent
JUDGMENT :
PAMIDIGHANTAM SRI NARASIMHA, J.
1. The petitioner before us, a Micro Enterprise, and its founder Dr. Jitendra Nath Verma, raise two important questions. The first question relates to the ‘right’ of Micro and Small Enterprises1[Hereinafter referred to as the “MSE(s)”.] to supply 25% of goods and services to be procured by the Government and its instrumentalities under its Procurement Policy. The second issue relates to the legality of ‘minimum turnover clauses’ prescribed in the Notice Inviting Tenders2[Hereinafter referred to as ‘NIT’.] issued by the Government and its instrumentalities. Determination of these questions required us to consider the ‘rights’ and duties flowing out of Section 11 of the Micro, Small and Medium Enterprises Development Act, 2006, 3[Hereinafter referred to as the “MSMED Act/Act”.] prescribing a Public Procurement Policy for Micro and Small Enterprises (MSEs) Order 20124[Hereinafter referred to as the “Procurement Order 2012”] and this consideration led us to examine the legal status of the Procurement Order 2012.
1.1. Having examined the legal regime concerning the promotion and development of MSEs, we have come to the conclusion that the Procurem
(1) Mandatory procurement by Government – There is no mandatory minimum procurement ‘right’ of an individual MSE.(2) Judicial Review – Power of judicial review in matters concerning implementation of....
The court upheld that stringent eligibility criteria in public procurement for critical operations are lawful and necessary, allowing no exemptions for MSMEs when justified by the operational context....
The court upheld that 100% reservation for MSEs in public procurement is valid under the MSE Policy, rejecting claims of arbitrariness towards tender selection processes.
The court affirmed that stringent eligibility criteria in public tender processes cannot violate statutory relaxations for Start-ups, emphasizing limited grounds for judicial review.
Judicial review of tender conditions is limited; courts should not interfere unless actions are arbitrary, discriminatory, or mala fide, ensuring public interest is prioritized.
In procurement matters, minimum eligibility criteria set by State authorities must be reasonable and not arbitrary; courts should exercise restraint in judicial review of such criteria.
Judicial review is permissible in tender matters only to prevent arbitrariness; criteria should ensure fairness and cannot favor specific bidders without rational basis.
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