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Meghalaya High Court · body

2018 DIGILAW 66 (MEG)

Agarwala Rice Enterprises v. Union of India

2018-09-26

S.R.SEN

body2018
JUDGMENT : 1. Both WP(C) No.121/2018 and WP(C) No.122/2018 came up for hearing on 11-09-2018 as both the cases are almost similarly situated. 2. The brief facts of WP(C). No. 121/2018 is as follows: “That the petitioner is a partnership firm and is a SSI Unit duly registered in the office of General Manager, The District Industries and Commerce Centre, Nagaon. The respondent no.2 issued invitation for online bid being Request for Proposal (RFP) bearing no. Q-DRY/RICE/SCH-01(B) /2018-19 dated 13.03.2018 issued by the Director General Assam Rifles, Shillong for supply of Rice (super fine) under Schedule No-01(B) to be delivered at 1 Maintenance Group Assam Rifles, Silchar (Assam) and 3 Maintenance Group Assam Rifles, Jorhat (Assam) and Air Maintenance Det, Happy Valley Shillong for the financial year 2018-19. In pursuance of the aforesaid Request for Proposal (RFP) bearing no. Q-DRY/RICE/SCH-01(B)/2018-19 dated 13.03.2018, seven parties including the petitioner submitted its bid. The petitioner being eligible submitted its bid and annexed all the requisite documents. The private respondent no.3 to 5 also participated in the tender process. Be it mentioned herein that the petitioner is the only SSI unit which participated in the bidding process. The said bid was submitted online on the 09.04.2018 before the stipulated time as mentioned in the corrigendum. Thereafter the tender was opened as stipulated time. The petitioner was eagerly awaiting the results of the technical bid as the petitioner had fulfilled all the criteria for qualifying the technical bid. The result of the opening of the technical bid was to be declared in the online. After much wait the results were declared on 16.05.2018 online. A technical evaluation report was uploaded on 16.05.2018 with the digital signature of Commandant and according to the said report, the bid of the petitioner was declared invalid showing the reason “Past performance cert not uploaded by the firm. Tender form not completely filled & signed, details of running contract and tender participation in FY 2018-19 not submitted”, i.e. not satisfying the mandates of Clause 20(d). Now, the Ministry of Micro, Small & Medium Enterprises (MSME) vide policy circular no. 1(2)(1)/2016-MA dated 10.03.2016 had clarified that all the central ministries/departments/central public sector undertaking (CPSUs) may relax conditions of prior turnover and prior experience with respect of Micro, Small & Medium Enterprises in all public procurement subject to meeting of quality and technical specification. Now, the Ministry of Micro, Small & Medium Enterprises (MSME) vide policy circular no. 1(2)(1)/2016-MA dated 10.03.2016 had clarified that all the central ministries/departments/central public sector undertaking (CPSUs) may relax conditions of prior turnover and prior experience with respect of Micro, Small & Medium Enterprises in all public procurement subject to meeting of quality and technical specification. This policy was adopted vide Office Memorandum of the Ministry of Finance, Department of Expenditure, Procurement Policy Division dated 25.07.2016. Further in the year 2017, the Office of the Development Commissioner, Department of Micro, Small & Medium Enterprises (MA Division) had passed an office memorandum bearing no. F No.1(2)(1)/2016-MA dated 09.02.2017 whereby it was stated and reaffirmed that „Government has already decided that there is no condition of prior turn over and prior experience. Traders and agents should not be allowed to avail the benefits extended under the PP policy?. As such the respondent authorities ought not to have invalidated the bid of the petitioner on the ground of non furnishing the Past performance cert. Technical Evaluation Committee while rejecting the technical bid of the petitioner stated a reason that the petitioner had not furnished information regarding tender participation in FY 2018-19. Be it mentioned herein that the bid time of the tender in the instant case started from 15.03.2018 and ended on 09.04.2018. The financial year 2018-19 started from 01.04.2018 and the petitioner submitted the bid on the last day of the bid submission date, i.e. 09.04.2018. And as such it was only 9 (nine) days from the beginning of the financial year till the date of submission of bid by the petitioners and during that period of nine days it is not possible for the petitioner to participate in any other tender process and as such no statement to that effect had been given. The said reason for invalidation the tender by itself in stained with malafide and such an action of the respondent authorities is illegal and is liable to be interfered with. Moreover, the Ministry of Micro, Small & Medium Enterprises (MSME) vide its notification bearing no. S.O. 581(E) dated 23.03.2012 provided for mandatory procurement of 20% from the Micro, Small & Medium Enterprises by all Central government departments. Moreover, the Ministry of Micro, Small & Medium Enterprises (MSME) vide its notification bearing no. S.O. 581(E) dated 23.03.2012 provided for mandatory procurement of 20% from the Micro, Small & Medium Enterprises by all Central government departments. The petitioner which is a SSI unit ought to have been selected and the respondent authorities having invited the tender for one financial year, the procurement of a minimum 20% of the respondent authorities ought to have been procured through a SSI unit, i.e. the petitioner, after due verification of the price quoted in the Commercial Bid/Cost Bid and in this view of the matter the impugned action on the part of the respondents in rejecting the valid bid of the petitioner is bad in law and is liable to be interfered with and the respondent authorities are further liable to be directed to consider the Commercial Bid/ Cost Bid of the petitioner. Thus this Writ Petition has been filed invoking the extra ordinary writ jurisdiction of this Hon’ble High Court.” The brief facts of WP(C). No. 122/2018 is as follows: “That the petitioner is a partnership firm and is a SSI Unit duly registered in the office of General Manager, The District Industries and Commerce Centre, Nagaon. The respondent no.2 issued invitation for online bid being Request for Proposal (RFP) bearing no. Q-DRY/RICE/SCH-01(A)/2018-19 dated 13.03.2018 issued by the Director General Assam Rifles, Shillong for supply of Rice (super fine) under Schedule No-01(A) to be delivered at 2 Maintenance Group Assam Rifles, Silchar (Assam) and 4 Maintenance Group Assam Rifles, Mantripukhri (Manipur) for the financial year 2018-19. In pursuance of the aforesaid Request for Proposal (RFP) bearing no. Q-DRY/RICE/SCH-01(A)/2018-19 dated 13.03.2018, seven parties including the petitioner submitted its bid. The petitioner being eligible submitted its bid and annexed all the requisite documents. The private respondent no.3 to 5 also participated in the tender process. Be it mentioned herein that the petitioner is the only SSI unit which participated in the bidding process. The said bid was submitted online on the 09.04.2018 before the stipulated time as mentioned in the corrigendum. Thereafter the tender was opened as stipulated time. The petitioner was eagerly awaiting the results of the technical bid as the petitioner had fulfilled all the criteria for qualifying the technical bid. The result of the opening of the technical bid was to be declared in the online. Thereafter the tender was opened as stipulated time. The petitioner was eagerly awaiting the results of the technical bid as the petitioner had fulfilled all the criteria for qualifying the technical bid. The result of the opening of the technical bid was to be declared in the online. After much wait the results were declared on 16.05.2018 online. A technical evaluation report was uploaded on 16.05.2018 with the digital signature of Commandant and according to the said report, the bid of the petitioner was declared invalid showing the reason “Past performance cert not uploaded by the firm, details of running contract and tender participation in FY 2018-19 not submitted”, i.e. not satisfying the mandates of Clause 20(d). Now, the Ministry of Micro, Small & Medium Enterprises (MSME) vide policy circular no. 1(2)(1)/2016-MA dated 10.03.2016 had clarified that all the central ministries/departments/central public sector undertaking (CPSUs) may relax conditions of prior turnover and prior experience with respect of Micro, Small & Medium Enterprises in all public procurement subject to meeting of quality and technical specification. This policy was adopted vide Office Memorandum of the Ministry of Finance, Department of Expenditure, Procurement Policy Division dated 25.07.2016. Further in the year 2017, the Office of the Development Commissioner, Department of Micro, Small & Medium Enterprises (MA Division) had passed an office memorandum bearing no. F. No. 1(2)(1)/2016-MA dated 09.02.2017 whereby it was stated and reaffirmed that “Government has already decided that there is no condition of prior turn over and prior experience. Traders and agents should not be allowed to avail the benefits extended under the PP policy”. As such the respondent authorities ought not to have invalidated the bid of the petitioner on the ground of non furnishing the Past performance cert. Technical Evaluation Committee while rejecting the technical bid of the petitioner stated a reason that the petitioner had not furnished information regarding tender participation in FY 2018-19. Be it mentioned herein that the bid time of the tender in the instant case started from 15.03.2018 and ended on 09.04.2018. The financial year 2018-19 started from 01.04.2018 and the petitioner submitted the bid on the last day of the bid submission date, i.e. 09.04.2018. Be it mentioned herein that the bid time of the tender in the instant case started from 15.03.2018 and ended on 09.04.2018. The financial year 2018-19 started from 01.04.2018 and the petitioner submitted the bid on the last day of the bid submission date, i.e. 09.04.2018. And as such it was only 9 (nine) days from the beginning of the financial year till the date of submission of bid by the petitioners and during that period of nine days it is not possible for the petitioner to participate in any other tender process and as such no statement to that effect had been given. The said reason for invalidation the tender by itself in stained with malafide and such an action of the respondent authorities is illegal and is liable to be interfered with. Moreover, the Ministry of Micro, Small & Medium Enterprises (MSME) vide its notification bearing no. S.O.581(E) dated 23.03.2012 provided for mandatory procurement of 20% from the Micro, Small & Medium Enterprises by all Central government departments. The petitioner which is a SSI unit ought to have been selected and the respondent authorities having invited the tender for one financial year, the procurement of a minimum 20% of the respondent authorities ought to have been procured through a SSI unit, i.e. the petitioner, after due verification of the price quoted in the Commercial Bid/Cost Bid and in this view of the matter the impugned action on the part of the respondents in rejecting the valid bid of the petitioner is bad in law and is liable to be interfered with and the respondent authorities are further liable to be directed to consider the Commercial Bid/ Cost Bid of the petitioner. Thus this Writ Petition has been filed invoking the extra ordinary writ jurisdiction of this Hon’ble High Court.” 3. Heard Mr. G.N. Sahewalla, learned Sr. counsel assisted by Mr. M. Sahewalla, learned counsel on behalf of the petitioners as well as Ms. A. Paul, learned ASG on behalf of the respondents. Learned counsels submit that both the cases are similar in nature, so it has been taken up for hearing together for disposal by this common judgment. 4. Heard Mr. G.N. Sahewalla, learned Sr. counsel assisted by Mr. M. Sahewalla, learned counsel on behalf of the petitioners as well as Ms. A. Paul, learned ASG on behalf of the respondents. Learned counsels submit that both the cases are similar in nature, so it has been taken up for hearing together for disposal by this common judgment. 4. Learned counsel for the petitioners in addition to his oral submission also submitted a written submission which is reproduced herein below: “Petitioner is a partnership firm and is an SSI Unit duly registered as per the Micro, Small and Medium Enterprises Development Act 2006, hereinafter called as the Act. Section 11 of the said Act, deals with procurement preference policy under which The Public Procurement Policy For Micro and Small Enterprises Order 2012 was made, as per which every Central Ministry or Department or Public Sector undertaking has to procure minimum of 20% of the total annual purchase of the products and services rendered by such industries. As per Order 6 of the said Order, the Micro and Small Enterprises are to get 15% price preference in procurement and thereby their price goes down to match with the L1 price. Clause 10, Micro and Small Enterprises need not pay tender fee and they are exempted from payment of earnest money, besides that various other facilities are provided under the said order. Subsequently, the Office Memorandum dated 9th February, 2017 was issued as per which that the Medium and Small Enterprises need not comply with prior turn over or prior experience and no condition shall be applied to them. The 350 items which are mentioned in the Order of 2012 are to be compulsorily procured from such industries. The office order as well as Office Memorandum are annexed to the writ petition as Annexure-IX and VIII respectively. As per Office Memorandum dated 25th July, 2016 prior turn over and prior experience condition may be relaxed by the Central Ministry/Department etc. 2. The respondent No. 2 issued invitation for online bid being request for proposal on 13.03.2018 of Schedule No. 01A for supply to Maintenance Group Assam Rifles, Silchar and Maintenance Group Assam Rifles, Matripukhuri, Manipur for the year 2018-19. Similar RPF was issued on same date under Schedule No. 1B to deliver at Maintenance Group Assam Rifles, Silchar, Maintenance Group Assam Rifles, Jorhat and Air Maintenance Department, Happy Valley, Shillong. Similar RPF was issued on same date under Schedule No. 1B to deliver at Maintenance Group Assam Rifles, Silchar, Maintenance Group Assam Rifles, Jorhat and Air Maintenance Department, Happy Valley, Shillong. Further as per said RPF the tender is to be submitted on or before 03.03.2018 and tenders are to be opened on 04.03.2018. However, corrigendum dated 15.03.2018, the dates were changed to 09.04.2018 and 10.04.2018. The seven parties participated in the bid, petitioner was the only SSI Unit. In Tender 1A EMD exemption was allowed whereas Tender 1B EMD exemption was not allowed. However, Clause 20(d) deals with past experience past performance certificate whereby 3 years past performance was required and no exemption has been shown to SSI Unit. As per Clause 20(L) bidders are also to submit running contract and participation in financial year 2018-19 alongwith value of the same and failing which his tender is liable to be rejected although the bid is to be submitted on 09.04.2018. As in Clause 20(Q) authorized Dealer distributor’s Certificate issued by the manufacture to the bidder for particular brand of the tender item is to be annexed. Tender No. 1 (B) in connection with WP(C) No. 121/12018 was rejected on the following two counts. (1) Past Performance Certificate not uploaded by the firm (2) Tender Form not completely filled and signed and details of running contract and tender participation and financial year 2018-19 not given. Whereas the tender No. 1(A) in connection with WP(C). No. 122/2018 was rejected on the following two counts, (1) Past Performance Certificate not uploaded by the firm and (2) details of running contract and tender participation in financial year 2018-19 not submitted. So far Past Performance Certificate is concerned, the same is not required so far Micro and SSI Units are concerned in view of Office Memorandum dated 09.02.2017 Annexure-VIII. So far Past Performance Certificate is concerned, the same is not required so far Micro and SSI Units are concerned in view of Office Memorandum dated 09.02.2017 Annexure-VIII. Running contract and tender participation in financial year 2018-19 is concerned, the tender was issued 13th March, 2018 and as per initial tender that the tender is to be submitted on 3rd March 2018 and the same is to be opened on 4th March 2018 and even as per the corrigendum, the tender is to be submitted on or before 9th April 2018 and the same is to be opened on or before 10th April, 2018 and it cannot be imagined as to how a tendered can give details of running contract for the financial year 2018-19 and tender participation of the same year. The same way Micro and SSI Unit need not submit past performance certificate and the second condition also does not apply to the same. So far the ground tender from not completely filled and signed in WP(C) No. 121 of 2018 is absolutely incorrect inasmuch as petitioner submitted both tenders in the similar way and all the pages were signed. However in tender 1(B) in connection with WP(C). No. 122 of 2018, earnest money exemption was allowed and as such there is no question of filling of schedule 01(B) in connection with earnest money deposit. However, that page was also signed and that cannot be a ground for rejection of the tender. Further respondent No. 4 and 5 as per Clause 20(Q), certificate was issued of (1) Micro Industry of Dimapur namely, Raising Food Products and the said industry issued certificate both respondent No. 4 and 5 although the annual capacity of the said Raising Food Products (Mill) is 250 Tons whereas requirement of rice in tender No. 1 (A) is 3400 Tons and 1(B) is 2900 Tons and total is 6300 Tons and as such the question of supplying rice to that extent by the said Raising Food Products does not arise at all and the respondents failed to consider this aspect of the matter in selecting both respondent No. 4 and 5 for the purpose of awarding the contract. 3. 3. In the Affidavit-in-opposition respondent No. 1 and 2 took a plea at as per Office Memorandum dated 28th September, 2016 of the Central Government, there is a clause that there may be circumstances like procurement of items relating to public safety, health and critical operations and equipment etc. where procurement entities they prefer the vendors to have passed prior experience rather than giving orders to the new entities which is not applicable in the instant case inasmuch as in the instant case it is a supply of rice and the petitioner has been operating for last 3 years. Thereafter the subsequent Office Memorandum dated 09 February, 2017 the condition of prior turn over or prior experience is totally exempted in respect of Micro and Small Enterprises. Thereafter in the affidavit they have enclosed a copy of the Procurement Goods Manual Annexure-9 Sample Pre Qualification Criteria and it is not known when it was issued in any case the same will not be applicable so far the Micro and SSI Units are concerned and as such the grounds on which the petitioner were rejected are absolutely arbitrary and the acceptance of the tender of respondent No. 4 and 5 are also illegal inasmuch as they are the authorized dealer of an industry which has a manufacturing capacity of 250 Tons only whereas requirement in both the tenders are 6300 Tons in the year. That the departments have to procure 20% minimum from the Micro and Small Industries and they have vaguely said that they have already purchased which will not exempt them from purchasing in respect of the petitioner industry.” 5. On contra, learned ASG submits that the NIT was floated for Super Fine Rice for FY 2018-19 but petitioners in their tender did not mentioned whether they were eligible to supply Super Fine Rice or not, neither all the tender pages were filled up or signed and they also failed to give the Past Experience and Performance Certificate as well as the Financial Stability Certificate. On these grounds, their tenders were rejected. 6. After hearing the submission advanced by the learned counsels for the parties and on perusal of the record of both WP(C) No. 121/12018 and WP(C) No. 122/2018, it appears that in WP(C). On these grounds, their tenders were rejected. 6. After hearing the submission advanced by the learned counsels for the parties and on perusal of the record of both WP(C) No. 121/12018 and WP(C) No. 122/2018, it appears that in WP(C). No. 121/2018 tender was rejected due to (1) non filing of Past Experience and Performance Certificate by the firm (2) tender form was not completely filled up and signed and (3) details of running contract and tender participation in FY 2018-19 not given. Rejection of tender in WP(C) No. 122/2018 was due to (1) Past Experience and Performance Certificate not furnished and (2) details of running contract and tender participation in FY 2018-19 was not submitted. 7. After perusal of the case records of WP(C) No. 121/2018 and WP(C) No. 122/2018 and the submissions advanced by the learned counsels, I am of the considered view that NIT is the ground for tender and both the parties are bound by the terms and conditions of the NIT. Secondly, on principle, though the lowest bidder should get the tender, but it does not mean that the lowest bidder will supply the lowest quality of goods. Thirdly, invitee of the tender must select the bidder without any favour or dis-favour considering the eligibility of past experience and capacity to supply the quality of goods. 8. However, it does not mean that the new growing up firms who have not supplied earlier and does not have the past experience can be rejected only on that ground alone if otherwise, they fulfill all the terms and conditions of the NIT. 9. I am of the further view that while choosing the bidder, it is the invitee of the tender who will be the best person to select the eligible bidder as per terms and conditions of the NIT and no discrimination should be done to anyone. In both these instant cases in hand, it is clear that the tender is for Super Fine Rice. In my opinion, they should ask them whether they are in a position to supply Super Fine Rice and also to check the sample. 10. I leave the matter with the respondents to decide who is the proper bidder in the light of the observation made above and to take necessary steps. 11. With this observation, both WP(C) No. 121/2018 and WP(C) No. 122/2018 are disposed of by this common judgment. 10. I leave the matter with the respondents to decide who is the proper bidder in the light of the observation made above and to take necessary steps. 11. With this observation, both WP(C) No. 121/2018 and WP(C) No. 122/2018 are disposed of by this common judgment. Interim order passed earlier is hereby vacated subject to follow the observation made by this Court above.