The State Government has the right to restrict the purchase of certain drugs and medicines from reputed concerns to ensure quality.

JUDGMENT

A. Pasayat, J. - Petitioner, a small scale industrial unit, has called in question certain stipulations imposed by the Director of Medical Education and Training, Orissa in the tender call notice for supply of drugs and medicines for the year 1997-98. It basically questions stipulation about purchase of tender paper on payment of Rs. 500/-, exemption from payment of earnest money, security deposit and restriction of zone of consideration to the reputed firms. Its case is based on certain provisions under the Industrial Policy Resolution, 1996 (in short, 'IPR, 1996') more particularly Clauses 20.5 and 20.6 thereof. So far as exemption from earnest money deposit and purchase of tender papers are concerned, it is accepted that without prejudice to the claims involved the petitioner had purchased tender paper and has deposited the earnest money. It is highlighted that the expression 'reputed firm' is a vague term and in any event for survival of the small scale industrial units, the restriction of zone of consideration to reputed firms will be against the very policy of the State Government intended to encourage the industrial growth in the State. In the Government Stores Purchaes Programme initially started by Directorare General of Supplies and Disposals, the Union Minister of Supply laid down a procedure for purchase from Small Scale Industries. The role of National Small Industries Corporation (in short, 'NSIC') in securing them a large share of Government orders was spelt out. The eligible Small Scale Units are registered under the Single Point Registration of NSIC making them competent and eligible to execute Government orders. A provision has been made for extension of preferential purchase policy in respect of Small Scale Industries to all Central and State Government Departments and Public Sector Enterprises is terms of -

(i) Purchases from small scale sector as per reservation,

(ii) identification of new products made in the small scale sector for purchase and enlarging the number of suppliers;

(iii) effective recognition of the Single Point Registration Scheme of NSIC, and exempting Units enlisted under the Scheme from payment of earnest money, fee for tender documents and security deposits; and

(iv) prompt payment to small scale units.

2. According to the petitioner these objects have been given a go-by and the action of the Director of Medical Education and Training, Orissa (in short, 'DMET') (opp. party No. 2) has clearly violated all the promises held out to small scale industrial units.

3. In the counter affidavit filed by the State and the DMET it has been stated that the tender in question was not meant for SSIs alone and the petitioner cannot claim the benefit of exemption from payment of earnest money and cost of tender paper. The advertisement clearly stated that tenders are invited from reputed manufacturing firms/public sector undertaking firms. While there can be no impediment for the petitioner to apply as a small scale industry, unless the petitioner satisfied the criteria of being a reputed manufacturing firm/public sector undertaking firm, no relief could be granted to it. The firms involved in supplying medicines publish a current index of medical specialities and a monthly index medical specialities. In these indices, a list of reputed firms is published. As a matter of practice, tenders from only these reputed firms are accepted for certain items, construing them as reputed firms within the meaning of the advertisement As per the Government decision, 225 items of drugs and medicines are to be procured for hospitals in the State under the Health and Family Welfare Department. Out of these 225 items, 32 items have been earmarked for procurement from E.P.M. rate contract holding SSI Units. The rates fixed by the Director of E.P.M. are accepted so far as these items of medicines are concerned. 14 times are procured from E.P.M. rate contract holding S.S.I. Unit on fixed percentage of supply share