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IN THE HIGH COURT OF ALLAHABAD
Sunita Agarwal and Jayant Banerji, JJ.
Bharat Forge Limited - Appellant
Vs.
The Principal Chief Materials Manager Diesel Locomotive Works and Ors. - Respondent
Writ C. No. 17620 of 2019
Decided On: 18-12-2020
Make in India Policy - Public Procurement - Indian Companies Act - [Turbo Wheel Impeller Balance Assembly] - [Indian Companies Act, Public Procurement Order 2017, Make in India Policy] - The court discussed the applicability of the Make in India Policy and the Public Procurement Order 2017 in the context of a tender for procurement of Turbo Wheel Impeller Balance Assembly. The court emphasized the importance of mentioning the correct HSN Code and GST rate in the tender document to ensure fair competition and a level playing field for all bidders. The court directed the respondent to clarify the correct HSN Code and GST rate for the procurement product and include it in the tender document to ensure uniform bidding and fair competition.
Fact of the Case:
The petitioner, a company registered under the Indian Companies Act, participated in a tender for the procurement of Turbo Wheel Impeller Balance Assembly issued by Diesel Locomotive Works, Varanasi. The petitioner, being a local manufacturer, claimed that it was unfairly prevented from availing the benefit and preference under the Make in India policy due to incorrect GST rates quoted by other bidders. The petitioner sought clarification on the correct HSN Code and GST rate for the procurement product and challenged the tender process.
Finding of the Court:
The court found that the mentioning of the correct HSN Code in the tender document was integral to the tendering process and had an impact on the selection of tenderers. The court emphasized the need for fair competition and a level playing field for all bidders. The court directed the respondent to clarify the correct HSN Code and GST rate for the procurement product and include it in the tender document to ensure uniform bidding and fair competition.
Issues: The issues involved in the case included the applicability of the Make in India Policy and the Public Procurement Order 2017, the fairness of the tender process, and the responsibility of the tendering authority to ensure uniform bidding and fair competition.
Ratio Decidendi: The court held that the mentioning of the correct HSN Code in the tender document was essential to ensure fair competition and a level playing field for all bidders. The court emphasized the need for transparency and uniform bidding in the tender process.
Final Decision: The court disposed of the writ petition with the direction to the respondent to clarify the correct HSN Code and GST rate for the procurement product and include it in the tender document to ensure uniform bidding and fair competition.
ORDER :
1. Heard Shri Kavin Gulati, learned Senior Advocate assisted by Shri Prashant Shukla and Ankur Sehgal, learned Advocates for the petitioner; Shri Shashi Nandan, learned Senior Advocate assisted by Shri Udayan Nandan and Shri Ajay Sondhi, learned Advocates for the respondent no. 6 and Shri Rajnish Kumar Rai, learned Advocate for the respondent nos. 1 to 5 (Railways).
2. The petitioner herein is a company registered under the provisions of the Indian Companies Act having its registered office at Pune Cantonment, Mundhwa, Pune, Maharashtra.
3. The respondent no. 1, Diesel Locomotive Works, Varanasi published a notice dated 11.4.2019 inviting e-tender for procurement of Turbo Wheel Impeller Balance Assembly to D.L.W. Part no. 16080385. The Turbo Wheel Impeller Balance Assembly (in short referred to as the "procurement product") is an assembly critical to the 710G HHP locomotive run by the Railway. This product consists of a turbine and a compressor, coupled on a common shaft, and balanced to enable its rotation at speeds as high as 22,000 RPM(rounds per min). This assembly is an essential moving part of the 710-G turbocharger. With the drop in higher temperature exhaust gases, there is rotational energy delivered to the turbine which in turn delivers its input to the compressor, enabling pumping of high density air into engine cylinders, for combustion.
4. A reading of the tender document shows that the validity period of offer was 120 days. The commercial compliance conditions of the tender, relevant for our purpose, are as under:-
10. Please enter the percentage of local content in the material being offered. Please enter 0 for fully imported items, and 100 for fully indigenous items. The definition and calculation of local content shall be in accordance with the Make in India policy as incorporated in the tender conditions."
5. The Special Condition no. 2 relevant to the case reads as under:-
6. It is contended by the petitioner that in order to promote local manufacturer and production of Goods and Services in India with a view to enhance employment opportunities, the Government of India had issued "Public Procurement" (Preference to Make in India) Order' 2017 (in short as the "Public Procurement Order, 2017)," pursuant to Rule 153(iii) of the General Financial Rules 2017 issued by the Ministry of Commerce and Industry, Department of Industrial Policy and Promotion, Government of India.
7. The relevant provisions of the Public Procurement Order, 2017 are as under:-
'Local content' means the amount of value added in India which shall, unless otherwise prescribed by the Nodal Ministry, be the total value of the item procured (excluding net domestic indirect taxes) minus the value of imported content in the item (including all customs duties) as a proportion of the total value, in percent.
'Local supplier' means a supplier or service provider whose product or service offered for procurement meets the minimum local conte
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