IMPORTANT POINTS
(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 policy objectives should transcend standard power of judicial review to issue writs to perform statutory duty and proceed to examine whether duty bearers, authorities and bodies constituted properly and also whether they are functioning effectively and efficiently.

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 Procurement Order 2012 has the force of law and is enforceable. While the Act and the Procurement Order 2012 do not create an ‘enforceable right’ for an individual MSE, the statutory authorities and administrative bodies created thereunder are impressed with enforceable duties. They are accountable and subject to judicial review. We have also explained how the scope of judicial review in these matters should transcend the standard power of judicial review to issue writs of mandamus to perform the statutory duty and proceed to examine whether the duty bearers, the authorities and bodies are constituted properly and whether they are functioning effectively and efficiently. By ensuring institutional integrity we achieve our institutional objectives.

1.2. Having considered the establishment of the National Board for MSMEs, Advisory Committee, Facilitation Council under the statute, and in particular, the establishment of the Review Committee and the Grievance Cell under the Procurement Order 2012, we have issued specific directions to address the issues arising for consideration and issue necessary guidelines for the effective implementation of the Procurement Order 2012.

2. Brief facts : The brief facts necessary for the disposal of the case are as follows. The first Petitioner is a Micro Enterprise under Section 7 of the MSMED Act, 2006, and operates in the pharmaceuticals and medical biotechnology sector. More specifically, the Enterprise’s business involves the manufacturing, development and marketing of healthcare products. The second petitioner, the founder and managing director of the enterprise, is a specialist in the application of ‘Liposome Technology’ for healthcare, a technology utilised for delivering drugs to the human body. Put simply, this involves enveloping a drug in a bubble made of fats or lipids, which can be dissolved and absorbed directly into the specific site of the body targeted for treatment. Pertinent in the context of this petition is the company’s production of a nano-drug called ‘Liposomal Amphotericin B Suspension in Saline- Fungisome’ (‘LAmB’), which is a special form of medication to treat serious fungal infections. The Enterprise claims that LAmB is the only medication in India that treats fungal infection effectively and generates the least amount of toxicity in the kidney compared to other medications formulated and sold by other players in the field. The petitioners state that the Government of India has also recognised LAmB as a critical life-saving drug, and recently, the drug proved instrumental in treating patients suffering from mucormycosis amid the rise of COVID-19.

3. The Enterprise claims that it has attempted to participate in several public procurement processes to supply the drug it manufactures. However, it continu