A micro and small enterprise is not exempt from providing a performance security in a tender if the tender is issued by an independent company, as per the provisions of the U.P. Procurement Manual.

JUDGMENT :

(Shekhar B. Saraf, J.)

We have heard learned counsel appearing on behalf of the petitioner, learned counsel appearing on behalf of the respondent No. 2, being the Uttar Pradesh Power Corporation Limited and learned Standing Counsel for the State respondents.

2. In the present writ petition, the petitioner has prayed for the following reliefs :

''(a) issue a writ, order or direction in the nature of certiorari calling for the record of the matter and quashing the order dated 19.7.2024 passed by the respondent No. 2.

(b) issue a writ, order or direction in the nature of mandamus commanding the respondent No. 3 to exempt the petitioner from furnishing performance security pursuant to Offer (Letter of Intent) dated 15.5.2024 for supply of super enameled Aluminium winding wire manufactured by the petitioner in the light of provisions contained in para 9.17 of the U.P. Procurement Manual, 2016.

(c) issue a writ, order or direction in the nature of mandamus commanding the respondent No. 3 to issue amended Offer (Letter of Intent) dated 15.5.2024 as per provisions contained in para 9.17 of the U.P. Procurement Manual, 2016.

(d) issue any other or further order which this Hon'ble Court may deem fit and proper in the circumstances of the case.

(e) Award the cost of writ petition to the petitioner.''

3. The crux of the issue in this writ petition relates to a condition in the tender document issued by the respondent No. 3 for procurement of super enameled aluminium winding wire wherein a performance guarantee at the rate of 10% of the contract value is required to be furnished by the person, who is awarded the tender.

FACTS

4. The facts of the case, in nutshell, are as under :

(a) The tender was opened on 26.12.2023 and the petitioner applied for the same on 1.1.2024. Subsequent to the tender being filed by the petitioner, the petitioner raised an objection on 3.1.2024 with regard to the 10% performance security deposit on the ground that the said clause is in violation of the provisions of the Uttar Pradesh Procurement Manual, 2016 (hereinafter referred to as 'the Manual'). Thereafter, several such letters were written by the petitioner to the respondents. Furthermore, the Special Secretary, Government of U.P., Lucknow also issued several letters to the respondent No. 2, being the U.P. Power Corporation Limited, asking it to consider the performance guarantee and reduce the same from 10% to 1% in favour of the petitioner.

(b) It is to be noted that the petitioner was granted tender and Letter of Intent was issued on 15.5.2024. It is to be further noted that the petitioner had come to this Court in an earlier round of litigation and the U.P. Power Corporation Limited was directed to decide the issue with regard to the performance guarantee by an order of the coordinate Bench of this Court dated 4.6.2024. The respondent in furtherance of the above order, has passed an order on 19.7.2024 which is the impugned order in the present writ petition.

ARGUMENTS OF THE PETITIONER

5. Mr. Nikhil Kumar, learned counsel appearing on behalf of the petitioner has raised the following submissions :

(i) Mr. Kumar has placed Clause 9.17 of the Manual to emphasise that since the petitioner is a micro and small enterprise, it is exempted from furnishing performance security/guarantee against contract for supply of goods manufactured by it. The relevant paragraph of aforesaid clause of the Manual is provided below for better reference :

''9.17 Micro and Small Enterprises and Industrial Co-operatives within State, which have been registered as such with the Commissioner and Director of Industries, on furnishing proof of such registration are exemp