Point of Law: If denial of legitimate expectation in a given case amounts to denial of right guaranteed or is arbitrary, discriminatory, unfair or biased gross abuse of power or violation of principles of natural justice, the same can be questioned on the well-known grounds attracting Article 14 but a claim based on mere legitimate expectation without anything more cannot ipso facto give a right to invoke these principles.

JUDGMENT :

The petitioners in the above two writ petitions are Micro, Small and Medium Enterprises (hereinafter referred to as MSME). The petitioners are aggrieved by the implementation of the “Nilaavu” project by the respondents and the procuring of LED bulbs and other allied fixtures and fittings for street lighting in Local Self Government Institutions (LSGI for short) from agencies other than the petitioners and similarly placed MSMEs in the State. The project aims at replacing the conventional street lighting in all the LSGIs with LED lamps and the KSEB Ltd. was to be the special purpose vehicle for the project and the procurement of LED lights is to be through the 4th respondent. The issues involved in the writ petitions and the prayers made are similar and the writ petitions are being heard and disposed of together. The reference to Exhibits is, unless specified otherwise, as they appear in W.P.(C) No.5045 of 2021.

2. On 06.03.2014, the 1st respondent issued Exhibit P27 order whereby it was decided to replace the existing streetlights in the Municipalities in Kerala by LED lights, under a project called “Nagarajyothi”. A committee was formed to study and prepare a project report after discussion with the LSGI. By Exhibit P2 order dated 02.03.2015, sanction was accorded to Kerala Rural Employment and Welfare Society (hereinafter referred to as KREWS) for establishing a street light manufacturing, assembling and marketing unit in Kasargode district with public-private partnership mode. Pursuant to Exhibit P2, an agreement was entered into between KREWS and the petitioner in W.P.(C) No.5045 of 2021. It can be seen from the agreement that the proprietor of M/s.Usha Electronic Systems who was the main promoter of the 1st petitioner in W.P.(C) No.5045 of 2021 had submitted an "expression of interest" on 03.04.2015 for entering into the public-private partnership agreement and they were pre-qualified and selected by the Board of Directors of KREWS for the project. It was further decided that the private participant and KREWS shall form a special purpose vehicle in the form of a private limited company to be incorporated under the Companies Act, 2013. Kerala Gramajyothi Lighting Private Limited was formed pursuant to the agreement. In W.P.(C)No.3490 of 2021, there are six petitioners who had got registration as MSME and commenced production during the years 2012, 2015, 2018, 2017, 2019 and 2020, respectively.

A LITTLE HISTORY

3. On 30.01.2009 the Store Purchase Department (SPD for short) of the 1st respondent issued a circular which is marked as Ext.P11 in W.P.(C)No.3490 of 2021. The Circular notices the fact that though the Store Purchase Manual (hereinafter referred to as SPM) required that electrical fittings are to be procured from the small industries alone, the purchasing officers of some LSGI and other Government institutions are refusing to buy such items from the small industries. It was also noticed that in violation of the requirements in the SPM, tenders were being floated showing brand names of products. After noticing the above aspects, the Circular directs that when purchases are made on behalf of the Government or its agencies, the items which have been reserved in favour of small industries under Appendix 28 of the SPM shall be purchased only from such industries. It is further ordered that the responsibility to ensure the quality and to standardise the price throughout the State shall be on SIDCO. On 23.03.2012, Exhibit P6 order was issued by the Ministry of Micro, Small and Medium Enterprises, Government of India. The order is issued in exercise of the powers conferred in Section 11 of the Micro, Small and Medium Enterprises Development Act, 2006, notifying the "Public Procurement Policy for Micro and Small Enterprises (MSEs) Order, 2012" in respect of procurement of goods and services, produced and provided by Micro and Small Enterprises, by the Central Ministries, Departments and Public Sector Undertakings. Par