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.

COMMON ORDER :

P.T. ASHA, J.

Alleging that the respondent corporation is attempting to circumvent the procurement policy notified by the Ministry of Micro, Small and Medium Enterprises in exercise of the powers conferred under Section 11 of the Micro, Small and Medium Enterprises Development Act, 2006, hereinafter called the MSMED Act, the petitioners are before this Court.

2. It would be necessary to allude to the petitioners’ case as well as the defense to decide the issue on hand.

Petitioner’s Case:

3. The petitioners in both the writ petitions are manufacturers manufacturing plastic products and are Udayam - registered MSME units registered under the MSMED Act. It is their contention that the respondent corporation had issued the impugned tender for setting up of an outsourced container manufacturing unit at LBP, Manali, Chennai on 09.01.2026. The tender has been deliberately structured and projected as procurement of services for in-house manufacturing. According to the petitioners an artificial classifications and an attempt to deny the applicability of statutory public procurement policy framed under Section 11 of the MSMED Act has been created by this tender.

4. It is their case that the 1^st respondent corporation is a Central Public Sector Enterprise and an instrumentality of State under Article 12 of the Constitution of India. They are bound by constitutional mandate of fairness, transparency and non-arbitrariness in public procurement. The petitioner would submit that they are existing supplier / vendor in packaging industry and have supplied products and services confirming to stringent quality, inspection, safety and delivery standards expected by oil sector institutional buyer.

5.The petitioner is aggrieved by the fact that the respondents had adopted this procurement/framework wherein they have invited non- MSE suppliers to participate in the tender. The petitioners have been manufacturing and supplying the very same subject items to the respondents and there are no allegations or adverse remarks against them. The petitioners would submit that under earlier tenders for 1 litre, 800 ml and 500 ml containers floated through the GeM Portal, they have participated and was declared as L 1 bidder and they had also adhered to the tender specifications.

6. They would further submit that manufacturing units like the petitioners have been manufacturing the blow - moulded HDPE containers of various sizes catering to the oil and lubricant for over 25 years. As a result these industries are substantially dependent on the procurement of oil Public Sector Undertakings / CPSEs and their constituent units for their livelihood. The petitioners and similarly placed manufacturers have invested substantially in machinery, moulds and moulding infrastructure on the legitimate expectation that they would be a sole supplier of industrial packaging item which is one of the notified item under the Procurement policy for Micro and Small Enterprises Order, 2012, herein after called the PPP – MSE Order, 2012.

7. The respondents by floating the said tender is attempting to overturn the policy which has been framed in exercise of the statutory power vested with the Central Government under Section 11 of the MSMED Act and notified as the PPP – MSE