PERMOD KOHLI, J. - (1.) AGGRIEVED of the order dated 04.04.2006 passed in W.P. (C) No. 1046 of 2006 dismissing the writ petition, the appellant has filed this Letters Patent Appeal challenging the order.
(2.) THE appellant is a small scale manufacturing unit, registered with the Directorate of Industries in the State of Jharkhand having its industrial unit at Jamshedpur. The State of Jharkhand through the Department of Water Resources issued N.I.T., inviting tenders/quotations under No. 12/Pur -Pipes and Fittings for purchase of P.V.C. Pipes with ISI/ISO 9001:2000 Certification. This N.I.T. was for an Emergent Quotation Notice. The date for supply of documents was stipulated as 17.02.2006 to 21.02.2006 and the last date for receipt of the bid was 22.02.2006 upto 3:00 P.M. and the opening of the bid was on the same day i.e. 22.02.2006 at 3:30 P.M. in the Office of the Secretary, Water Resources Department (Government of Jharkhand), Nepal House, Doranda, Ranchi. The bids were to be submitted in two separate envelopes as 'Technical Bid' and 'Financial Bid'. Some of the terms and conditions of the N.I.T. relevant for purposes of this Appeal are noticed hereunder: 8. Only manufacturer or their authorized representative or State Distributors are eligible for participation in quotations. 11. The quoted rates should be valid for all materials of I.S.I. mark and of standard make (as per details mentioned in Paragraph 7). 12. The attested photocopy of up to date income tax, sales tax clearance certificate, registration certificate, I.S.O. certificate, B.I.S. License etc. be submitted by the Quotationers. 16. The Quotationer should enclose attested photocopies of all certificates (Mentioned in sl. 12) Technical documents and catalogues in one envelope super scribed as Technical Bid and Financial Bid envelope will be opened only after 'Technical Bid' envelope has been assessed and found to confirm to requirements. 17. Before opening of quotation all Quotations should submit specimen sample for their products in the office of Director, Purchase 7 Transport, W.R.D. Ranchi on date 22.02.06 up to 3.00 P.M. 19. The quantity of purposed supply may be increase or decreased for which no claim will be entertained. 20. Before supply of materials quality will be inspected by departmental officers authorized by departmental on the cost of the Quotationer and then material will be accepted. Besides the above conditions, it was also stipulated that only such manufacturers, whose annual turn over is at least Rs. 250 crores and production capacity of 50,000 MT are eligible for tendering. It is this stipulation, which seems to have persuaded the appellant -petitioner to approach this Court, seeking annulment of these conditions. The petitioner -appellant, accordingly, sought following reliefs: A. For issuance of an appropriate writ or a writ in the nature of certiorari for quashing the notice inviting tender, being N.I.T. No. 12/Pur -Pipes and Fittings, published in the Daily Newspaper 'Prabhat Khabar' to the extent that only those manufacturers with annual turnover of at least Rs. 250 Crores and production capacity of 50,000 MT have been invited to submit their bids in respect of the said tender. B. For issuance of an appropriate writ or a writ in the nature of mandamus directing the Respondents to allow the Petitioner to participate in the said bit after waiving the aforesaid two conditions and consider the bids submitted by the Petitioner on its own merit. C. For issuance of an appropriate writ or a writ in the nature of mandamus directing the Respondents to implement Clause 32 of the Jharkhand Industrial Policy and especially Clause 32.1.1 thereof which provides that the product of industries located within the State will be eligible for the facilities of preferential purchase by State Government departments and the agencies under its control and that minimum 75% of the total order placed with respect to any such tendered item be supplied exclusively by the manufacturing industrial units located within the State. D. For issuance of any other appropriate writ(s) or direction(s) or order(s) as Your Lordships may deem fit and proper in view of the facts and circumstances of the case for doing conscionable justice to the Petitioner
(3.) CHALLENGE to the N.I.T. was two fold: (i) That the aforesaid condition of annual turn over of Rs. 250 Crores and manufacturing capacity of 50,000 MT per annum have been incorporated to exclude small and particularly local manufacturers and with a view to help the few large manufacturers. (ii) These conditions run contrary to the State's Industrial Policy, which, inter alia under Clauses 32.1, 32.1.1, 32.1.2, 32.1.3, 32.1.4 and 32.2 prescribe market support to the local industrial units with a clear stipulation that minimum 75% of the total order is to be placed with the local industries situated within the State though without compromising with the quality. Relevant extracts of the Industrial Policy are noticed hereunder: MARKETING ASSISTANCE AND OTHER LINKAGES 32.1 Marketing of products has been recognized as the weakest link for the Tiny/SSI Sector particularly those in the rural areas. The following measures would be undertaken to facilitate assistance: 32.1.1 The Policy of the State Government is to ensure that State Government departments and various agencies under its control purchase their requirement of store items from industries located within the State. In order to achieve this, the product of industries located within the State will be eligible for the facilities of preferential purchase by State Government departments and the agencies under its control. Various departments of the State Government and the various agencies under its control would ensure, without compromising the quality, that minimum 75% of the total order placed with respect to any such tendered item be supplied exclusively by the manufacturing industrial units located within the State. It would also be ensured that 33% of the total annual purchase by any department/agency should be exclusively supplied by the manufacturing small scale industrial units located within the State. In order to provide the price preference facilities, with respect to certain identified items) being manufactured by the Small Scale Industries located within the State, with the objective of providing competitiveness of such items), a High level Committee would be constituted by the State Government, which shall duly assess the competitiveness of such items as referred and make recommendations. The State Govt. shall ensure appropriate action with respect to such recommendations to encourage such small scale industrial units. Price preference shall be admissible as per the provisions to the Industrial products of the small scale industrial units. The Central Government, its various agencies and private/joint sector industries located within the State will be persuaded to accord similar facilities to the products of local industries. New industrial units coming up in the State will be persuaded to patronize local industries/firms for construction/supply of materials. 32.1.2 Local small scale industrial units registered with DIC/IADA shall have to deposit only 50% of the earnest money while submitting tenders with the State Government departments and various agencies under its control. 32.1.3 The problem of delayed payment to SSI units by the Govt. Departments/corporation's/Boards or large industrial undertakings creates severe financial constraints to SSI. To tackle this problem, the State Government would constitute an 'Industrial Facilitation Council' at Ranchi as per the provisions of the 'Interest on Delayed Payment to Small Scale and Ancillary Industrial Undertaking Act, 1993' 32.1.4. The State Government would additionally take the following initiatives: Develop a strong date base to provide trade and export related information. Purchase of ISO/ISI certified products will be given preference. The government will assist NGOs and other such agencies, which facilitate marketing of products in rural areas. Organizing Buyer - Sellers meet involving public sector/private sector enterprises. Organizing Trade Fairs/Handicrafts Melas for marketing assistance inside and outside the country. Encouraging E -Commerce. 32.2 PREFERENCE IN CASE OR PURCHASER OF RAW MATERIAL: The raw material generating units shall be persuaded to give purchase preference to the local industries for supply of such raw material, whose production is dependent upon the supply of such raw materials. Similarly, the PSU's/Private Sector large industries, located within the State would be persuaded to give purchase preference to the products of the local industries while making purchases of raw materials and other items required by it. Preference would also be given to the local industries in supply of forest produce available in the State. ;