IN THE HIGH COURT OF CHHATTISGARH AT BILASPUR
P.R. RAMACHANDRA MENON, PARTH PRATEEM SAHU, JJ.
M/s Navin Kumar Chopda, through its Proprietor - Navin Kumar Chopda – Appellant
Versus
Hindustan Petroleum Corporation Limited (HPCL) A Government Of India Enterprises – Respondent
WPC No. 310, 313, 340, 366 of 2019, 3162 of 2018
Decided on : 25-03-2021
Micro, Small & Medium Enterprises Development Act, 2006 - Section 11 - Alleged arbitrary action on part of Respondent-HPCL in finalizing tender for transportation of petroleum products contrary to Annexure-P/4 – Public Procurement Policy for Micro and Small Enterprises Order issued by Central Government and deviating from Annexure-P/2 Tender Conditions with regard to eligible quota earmarked to MSEs like Petitioners and in awarding same to persons of choice like private Respondents herein, who are not even qualified under various heads, on a pick and choose basis, is subject matter of challenge in these writ petitions - WPC is taken as lead case and parties & proceedings are referred to as given therein except where it is separately mentioned, depending on context – Whether Respondent-HPCL has honoured commitment in Annexure-P/4 Procurement Policy Order and stipulation in Annexure-P/2 Tender Conditions, in providing minimum 20% work to MSE segment - Held, hold that there is no merit in writ petition as to alleged violation of Clause 6(2) of Annexure P/4 Procurement Policy Order or relevant terms and conditions of Annexure-P/2 Tender Claim for sharing of work on 'proportionate basis' among different MSEs at L1 level.- However, in view of challenge already raised against eligibility and qualification of 7th Respondent, who has already been blacklisted, terminating agreement and rejecting all 15' vehicles offered by him, Respondent-HPCL is directed to consider matter for filling up vacated slot at because of ouster of 7th Respondent for issuance of 'LOA' to eligible bidder/bidders next in queue, based on their merit; along with point discussed in previous paragraph.- Said exercise shall be done as expeditiously as possible, at any rate, with a period 'two weeks' from date of receipt of a copy of Court judgment - Writ petition disposed
ORDER :
P.R. Ramachandra Menon, J.
1. The alleged arbitrary action on the part of the Respondent-HPCL in finalizing the tender for transportation of petroleum products contrary to the Annexure-P/4 – the Public Procurement Policy for Micro and Small Enterprises (MSEs) Order 2012 (hereinafter referred to as 'Procurement Policy Order') issued by the Central Government and deviating from Annexure-P/2 Tender Conditions with regard to the eligible quota earmarked to the MSEs (Micro & Small Enterprises) like the Petitioners and in awarding the same to the persons of choice like the private Respondents herein, who are not even qualified under various heads, on a pick and choose basis, is the subject matter of challenge in these writ petitions.
2. WPC No. 3162 of 2018 is taken as the lead case and the parties & proceedings are referred to as given therein except where it is separately mentioned, depending on the context.
3. Mr. Vivek Chopda, the learned counsel addressed the Court on behalf of the Petitioners. The submission on behalf of the Respondent-HPCL was made by Mr. Ali Asgar, the learned counsel. We heard Mr. Vikram Sharma, who is the learned counsel for the State as well as the learned counsel appearing for the party-Respondents concerned, who have entered appearance.
4. At the very outset, it is relevant to note that, invoking the power under Section 11 of the Micro, Small & Medium Enterprises Development Act, 2006 (hereinafter referred to as 'the Act, 2006'), the Central Government has notified Annexure-P/4 Procurement Policy Order 2012, bringing it into force w.e.f. 01.04.2012. As per the relevant Clauses in the Annexure-P/4 Procurement Policy Order, 20% of the goods/work/services have to be earmarked to the MSE segment; of which 20% is for 'SC/ST MSEs' as defined by the Ministry in the Procurement Policy Order itself. This is with an intent to promote the 'Micro and Small' segment industries to an appropriate extent and as such, the Respondent-HPCL is also bound by the same. It was accordingly that, Annexure-P/2 NIT was issued inviting bids from the qualified parties for effecting transportation of petroleum products as mentioned in the Notification, also referring to the preference available to the MSE's segment as given in Annexure-P/4 Procurement Policy Order.
5. The Petitioner is a proprietorship firm engaged in the business of transportation of petroleum products and is a registered Micro and Small Enterprise under the Act, 2006 as discernible from Annexure-P/1. The Petitioner is owner of 10 Tank Trucks with carrying capacity of 18 KL (Kilo Litres) and above. Being qualified in all respects, the Petitioner submitted the bid online, quoting @ Rs.131 per KM for free delivery zone and Rs.2.23/KL/KM for beyond free delivery zone. All the relevant documents were furnished online as stipulated in the tender, besides submitting the hard copies of the relevant documents in the relevant covers stipulated in this regard.
6. In fact, as disclosed from the materials brought on record, the estimated Tank Truck requirement was assessed by the Respondent-HPCL and it was to be for a period of 'five years' from 01.10.2018 to 30.09.2023. The Tank Trucks required were of two different categories i.e. of 12 KL & above (but below 18 KL) and the other one of 18 KL & above. The requirement of the vehicles in the 1st category in respect of first three years was 19', whereas it was 201' in the 2nd category. The last date for submission of bid was fixed as 06.07.2018; which came to be extended till 23.07.2018 by a Corrigendum Notification. The tender was opened on 23.07.2018 and the bids received were evaluated, whereby the Petitioner got placed at Sl.No.14, on the basis of merit.
7. It is pointed out that the Petitioner, along with several other bidders, though got placed at L1 level by the Respondent-HPCL, Letter of Allotment (LOA) was not iss
The court emphasized the importance of adhering to tender conditions and equitable distribution under the MSE Policy, allowing for judicial intervention only in cases of illegality.
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 upheld the tender conditions allowing non-proportional allotment of work to MSMEs ranked as L1 without entitlement to proportionate distribution among qualified bidders.
The procurement policy mandates that specified items must be exclusively acquired from Micro and Small Enterprises, rejecting attempts to disguise procurement as a works contract.
The maximum benefit that can be reaped by an MSE under the Public Procurement Policy for MSMEs is up to 25% of the total tendered value, and the tender issuing authority cannot deviate from this stip....
The court upheld that adherence to tender guidelines by public entities is essential, and allegations of impropriety must be substantiated for judicial intervention.
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