STATE OF ORISSA AND ORS. Vs. UTKAL PHARMACEUTICALS MANUFACTURERS ASSOCIATION AND ORS.
LAWS(SC)-2016-2-159
SUPREME COURT OF INDIA (FROM: ORISSA)
Decided on February 08,2016

State of Orissa and Ors. Appellant
VERSUS
Utkal Pharmaceuticals Manufacturers Association And Ors. Respondents

JUDGEMENT

- (1.) Leave granted.
(2.) This appeal arises out of an order dated 20.12.2010 passed by the High Court of Orissa, whereby W.P.(C)No. 18496 of 2009 filed by respondent-Utkal Pharmaceuticals Manufacturers Association has been allowed and Clause 2.1 of Tender Conditions relevant to Tender Call Notice No. SDMU/2009-2010-DMC-11-009 struck down as unconstitutional.
(3.) Clause 2.1 assailed by the writ petitioner stipulates that principal manufacturing units with an annual turnover of 10 crores for the last three financial years alone shall be eligible for participating in the tender process for supply of drugs to the State of Orissa. The challenge mounted by the writ petitioner primarily proceeded on the ground that the condition aforementioned disqualifying smaller units from empanelment for supply of drugs was arbitrary, discriminatory and contrary to Industrial Policy Resolution 2007 (IPR 2007) as well as the Orissa Micro, Small and Medium Enterprise Development Policy, 2009 declared under notification dated 17.02.2009 published in the Orissa Gazette on 09.03.2009. That contention, it is noteworthy, has found favour with the High Court who has in terms of the impugned judgment and order struck down clause 2.1 of the Tender Conditions insofar as the same makes an annual turnover of 10 crores as the only basis for determining whether a manufacturing unit does or does not qualify for empanelment. The High Court has while doing so held that Clause 2.1 of the tender conditions was contrary to the State Government policies under which small scale industrial units, including drug manufacturing units are entitled to certain specific benefits in terms of payment of earnest money, price preference and price comparison by reference to VAT payable in Orissa.;


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